In a vote of MEPs ( in — 574 votes against — 13 abstentions — 60) was approved by the December agreement, which proposed more stringent regulations for virtual currencies to prevent their use for money laundering and financing of terrorism.
The agreement constitutes the fifth and last update of the EU Directive on combating money laundering and, in part, a response to the terrorist attacks in 2015 and 2016 in Paris and Brussels, as well as on offshore Panama scandal Papers.
Reform that gives citizens the right of access to information on beneficial owners of companies operating in the EU, can help to prevent the corrupt activities of companies created to launder money, hide income and evade taxes.
This additional measure will also disclose information about beneficial owners of trusts and similar arrangements to those who might be “legitimate interest”. This will provide the necessary information about trust investigative bodies and non-governmental organizations. Member States of the EU retain the right to give wider access to information in accordance with its national legislation.
The new measures also address the risks associated with prepaid cards and virtual currencies. To put an end to the anonymity associated with virtual currency exchange platform and providers of cryptocurrency wallets on a par with the banks will be required to conduct a comprehensive review of its customers, including verification.
In addition, such platforms and the service providers storage of cryptocurrency needs to be registered.
Other measures agreed as part of the update:
- lowering the threshold for identification of holders of prepaid cards from the current 250 Euro to 150 Euro;
- more stringent evaluation criteria of countries outside the EU, subject to a high risk of money laundering and closer scrutiny of transactions with participation of citizens from countries with risk factors (including the possibility of imposing sanctions);
- protection of whistleblowers who report on money laundering (including the right to anonymity).
Krisjanis Karins (EPP, LV):
“The behavior of criminals has not changed. Criminals use the anonymity to launder their illicit proceeds or financing of terrorism. The new legislation helps to minimize threats to our citizens and the entire financial sector, providing greater access to information about the people behind the companies and the tightening of rules regulating cryptocurrencies and anonimnie prepaid cards”.
Judith Sargentini (Verts / ALE, NL):
“Every year, we lose billions of euros due to money laundering, terrorist financing and tax evasion, the money that was supposed to go to Fund our hospitals, schools and infrastructure. In accordance with the new legislation we are introducing more stringent measures, the expanding obligations of financial institutions to perform thorough customer due diligence. It will shed light on those who are hiding behind companies and trusts, and robs our financial system.”
The renewed Directive will enter into force three days after publication in the Official journal of the European Union. The countries-EU members will have 18 months to incorporate the new rules into their national legislation.