Armadillo Legal Limited


What you need to know!

The 4th Anti Money Laundering Directive may have only recently been implemented but the 5th Anti Money Laundering Directive is on its way (with the 6th Anti Money Laundering Directive already being proposed). The new directive is designed to improve safeguards for financial transactions to and from high risk countries, ensure centralised registers in all member states and regulating virtual currencies and prepaid cards and has been extended as tax advisory services, letting agents and art dealers will all now have to comply.


9 July 2018
5th Anti Money Laundering Directive entered into force
10 Jan 2020
Beneficial Ownership Registers for Corporates implementation
20 Jan 2020
Deadline for member states to comply with the 5th AML Directive
10 March 2020
Beneficial Ownership Registers of Trusts implementation
10 Sep 2020
Centralised automated mechanism to allow identification of those who hold or control payment accounts and bank accounts.

Public access to beneficial ownership information

The regulations grant access to the general public to beneficial ownership information of EU based companies. The need to demonstrate a legitimate interest for access will be eliminated except for trusts and similar legal arrangements. Obliged entities will have to notify the authorities of discrepancies found while conducting customer due diligence (KYC) between the beneficial ownership information on the registers and the beneficial ownership information they hold otherwise. Beneficial owners will have an explicit obligation to provide the corresponding entities with their beneficial ownership information required for the register.

Know Your Customer: Obligation to consult beneficial ownership register

When performing a KYC prior to any new business relationship, the 5th directive makes it an obligation to consult the beneficial ownership register when performing AML due diligence.

Enhanced Due Diligence in respect of high-risk third countries

The 5th Directive introduces strict enhanced due diligence measures for financial flows from high-risk third countries. Companies dealing with customers from high-risk third countries will be required to conduct enhanced due diligence measures. Including:

  • Obtaining information on customers and UBO – including the reasons for proposed transactions and details on the source of UBO funding and wealth.
  • Reporting details to senior manager/MLRO and obtaining approval
  • Increasing controls on business relationships

Politically Exposed Persons (PEPs)

Member states will be obliged to create a list of national public offices and functions that qualify as politically exposed (PEP) on national level and including nationally registered international organizations; the EU will draft a corresponding list on EU level, consolidate the national lists from member states and publish the result. The lists will not name any persons.

Other features:

  • ends the anonymity of bank and savings accounts, as well as safe deposit boxes and creates central access mechanisms to bank account and safe deposit boxes holder information throughout the EU
  • lowers thresholds for identifying purchasers of prepaid cards and for the use of e-money
  • extends the scope to virtual currency platforms and wallet providers, tax related services and traders of art
  • makes information on real estate holders centrally available to public authorities
  • further enhances the powers of the Financial Intelligence Units and facilitates cooperation and information exchange among authorities