The 5thAML Directive aims to put in place certain guidelines for European Member States with a set deadline to implement them by the end of 2019.
The main proposed principles of the 5th AML Directive aim to enhance the transparency within the beneficial owners of the legal entities operating in the European Union via the obligatory creation of public central registers for the Ultimate Beneficial Owners (UBOs) of the legal entities. As per the proposed EU provisions, the public will have access to data on the beneficial ownership register of each legal entity.
According to the Statement made by the European Commission on 19th of April 2018, each EU Member State shall grant access on the beneficial owner of a trust arrangement to legal entities and individuals who manage to satisfy the ‘legitimate interest’ threshold as defined by the national legislative framework of each EU Member State. The ‘legitimate interest threshold’ differentiates and limits the public access to trust arrangements and similar legal and/or equitable arrangements due to their substance.
Also, the proposed provisions of the 5th AML Directive aim to put in place guidelines and safeguards for better connection of the beneficial ownership registers within the European Union in order to accommodate the exchange of information between the EU Member States.
The recommended provisions of the 5th AML Directive suggest that business transactions between obliged entities, as defined in the 4th AML Directive, and individuals or legal entities from high-risk ranked third countries will be subject to enhanced due diligence measures to ensure transparency and compliance with the new AML Directive.
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The agreed provisions of the 5th AML Directive will be endorsed by the European Parliament and the European Council. The EU Member States will then have up to 18 months to transpose these new rules in their national legislation.
Our professionals and legal team has the experience and expertise to provide advice and keep you updated regarding the new regulation. Feel free to contact Stephanos Evangelides, Director- Legal Services at Evangelides & Partners at [email protected] or Charles Savva, Managing Director, Tax & Immigration Advisor at Savva & Associates at [email protected] for an initial consultation.