October 22, 2018

October 19, 2018

Subscribe to Latest Legal News and Analysis

European Parliament Adopts Fifth Money Laundering Directive

On April 19, the European Parliament (EP) published a press release announcing its adoption of a proposal for a fifth Anti-Money Laundering Directive (MLD5). The introduction of MLD5 forms part of the European Commission’s action plan to counter terrorist financing and money laundering, published in February 2016 (further details are available in the Corporate & Financial Weekly Digest edition of February 12, 2016).

Notable changes under MLD5 include granting enhanced powers for direct access to information held in centralized bank account registries to designated EU Member States’ authorities and other relevant bodies, and increased transparency requirements in relation to:

  • corporate and other legal entities—establishing “a clear rule of public access” to beneficial ownership information; and
  • trusts—requiring firms that operate in the European Union to maintain beneficial ownership registers accessible to those who can demonstrate a legitimate interest.

Other changes MLD5 introduces are:

  • prevention of risks associated with the use of virtual currencies for terrorist financing and limiting the use of pre-paid cards;
  • improving the safeguards for financial transactions to and from high-risk third countries; and
  • ensuring centralized national bank and payment account registers or central data retrieval systems in all Member States.

MLD5 will go into effect 20 days after its publication in the Official Journal of the European Union. EU Member States will then have 18 months to transpose MLD5 into national law.

The EP’s press release concerning MLD5 is available here.

Currently the adopted MLD5 text is still being processed for publication in English; however, the proposal—which includes an explanatory memorandum—is available in English here.

For further details of the existing EU fourth Money Laundering Directive and its implementation in the United Kingdom, see the Corporate & Financial Weekly Digest edition of June 30, 2017.

©2018 Katten Muchin Rosenman LLP

TRENDING LEGAL ANALYSIS


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

44-0-20-7776-7666