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Where the operation of AML procedures are outsourced to a third party, it is the "obliged entity" that remains responsible.

 

As mentioned above, the Directive will need to be implemented across Europe over the next two years. The impact will therefore vary from country to country depending upon their starting point and the detail of what is introduced in each jurisdiction.  In the UK, general requirements applicable to everyone are set out in the Proceeds of Crime Act 2002, with the detail applicable to the UK equivalent of "obliged entities" set out in the Money Laundering Regulations 2007. The impact of the changes in the UK is therefore likely to be less than in some other countries. UK institutions may benefit from more of a level playing field across Europe.

 

One particular aspect of the Directive that has received significant media attention has been the requirement for each EU country to establish a register of beneficial ownership.  This should provide a greater degree of transparency.

 

It is difficult to be certain as to the impact at this stage. The next two years will be crucial as:

 

a). Each country implements the Directive.

 

b). The EU Commission is required to conduct an assessment of  the risks of money laundering and terrorist financing affecting the internal market and relating to cross-border activities and to to cover at least the following:

 

a). the areas of the internal market that are at greatest risk;

 

b). the risks associated with each relevant sector;

 

c). the most widespread means used by criminals by which to launder illicit proceeds.

 

 

John was quoted in an article in the Financial Times publication, "Ignites Europe" on the Directive. Read the article here.