New AML Directive – impact and requirements
- Member States will be bound by the New AML Directive as regards the introduction of licensing or registration duties for certain obliged institutions not already covered by these obligations, i.e.:
- exchange offices and check-cashing offices
- trust or company service providers
- gambling service providers
- In addition, the draft New AML Directive will allow Member States, under certain conditions, to extend the scope of the AML Regulation to other areas not covered thereby. It will be allowed where the national risk assessment by a Member State shows that, in addition to the obliged institutions listed in the AML Regulation, entities in other sectors are also at risk, provided that the Member State informs the European Commission about its intention. The European Commission may also decide to take the initiative to expand the scope of the AML Regulation at the EU level.
- Warranty requirements will also be required for executives and beneficial owners and, and in the case of executives – knowledge and experience requirements concerning the following obligated institutions:
- exchange offices and check-cashing offices
- trust or company service providers
- gambling service providers
- As regards other obliged institutions, Member States will be required to ensure that the executives and/or beneficial owners are not persons convicted of money laundering and predicate offense or terrorist financing.
- Administrative penalties for violations of various obligations provided for in the Directive will also be increased. As regards legal persons that are credit institutions or financial institutions, the maximum fine should be at least EUR 10,000,000 or 10% of the annual turnover shown in the last approved financial statements for the financial year. As regards natural persons, the maximum fine should be at least EUR 5,000,000. However, the draft New AML Directive explicitly allows Member States to adopt fines in excess of these amounts.