The Council of Economic and Finance Ministers has adopted the Third Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. The Directive applies to the financial and other key services sectors and also covers all providers of goods, when payments are made in cash in excess of €15,000. Those subject to the Directive must cooperate in the fight against money laundering by taking various measures to establish customers identities, report suspicions and set up preventive systems within their organisations. The European Commission proposed the Directive on 30 June 2004 and it was approved by the European Parliament in May 2005 in a form to which the Council has now agreed.
The Third Anti-Money Laundering Directive builds on existing EU legislation and incorporates into EU law the June 2003 revision of the Forty Recommendations of the Financial Action Task Force (FATF), the international standard setter in the fight against money laundering and terrorist financing. The Directive is applicable to the financial sector as well as lawyers, notaries, accountants, real estate agents, casinos, trust and company service providers. Its scope also encompasses all providers of goods, when payments are made in cash in excess of €15,000. Those subject to the Directive need to:
- identify and verify the identity of their customer and of its beneficial owner, and to monitor their business relationship with the customer;
- report suspicions of money laundering or terrorist financing to the public authorities - usually, the national financial intelligence unit; and - take supporting measures, such as ensuring a proper training of the personnel and the establishment of appropriate internal preventive policies and procedures.
- The Directive introduces additional requirements and safeguards for situations of higher risk (e.g. trading with correspondent banks situated outside the EU).
The existing 1991 Directive, as amended in 2001, will be repealed and replaced by this Directive, upon its effective entry into force.
Member States have agreed to implement the Directive within two years after its publication in the European Unions Official Journal, which will take place towards the end of 2005.