4MLD implemented across Europe

The Fourth Money Laundering Directive came into force across the EU on 26 June 2017. The significance of the changes it introduces will vary between jurisdictions, as many Member States had already implemented provisions that satisfy many of its requirements.

UK

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations came into effect, the main changes in which are summarised in our article here. 

France

4MLD has been transposed into French law by Order no 2016-1635 of 02 December 2016, with provisions to come into force from June 2017 to April 2018. However, the Order has still not been ratified.

Significant changes for France include:

• more entities are subject to vigilance measures, including insurance, bank or participative funding intermediaries
• an obligation to identify and assess risks is introduced for relevant entities
• information on effective beneficiaries of legal entities or foundations will be centralised; and
• Tracfin, the French anti-money laundering unit which handles the processing of information and enforcement, and the French Prudential Supervisory Authority, get greater powers.

Germany

Amendments to the German Anti-Money Laundering Act implementing 4MLD entered into force on 26 June 2017.

Significant changes for Germany include:

• For cash payments above a threshold of €10,000, companies will have to check the ID card or passport of the person making the payment and keep the data for a period of five years. 
• When such payments are made by companies it will be necessary to document the name, company form, registered address and name of the managing director(s) and verify this information in the company register. This includes shareholders of more than 25%. Where companies are not willing to provide this information, a suspect notification must be filed.
• There will be a central electronic “transparency register” of beneficial owners.
• Traders of goods who have received a cash payment of more than €10,000 must keep a detailed analysis of their AML risks and implement internal control mechanisms.

Spain

Most provisions of 4MLD have been implemented, but the Spanish regulator has not yet transposed every element of it into Spanish legislation.

Significant changes for Spain include:

• Tax crime is expressly introduced as a predicate offence for money laundering.
• Payments in cash are prohibited for amounts over €2,500 when any of the parties is acting in the course of their business or profession. The amount increases to €15,000 when the paying party is a natural person who is resident outside Spain for tax purposes and is not acting in the course of their business or profession.
• On reporting of suspicious trades, Spanish legislation establishes that any unusual transaction needs to be closely investigated. If it is considered suspicious or is related to money laundering or financing terrorism, this issue must be notified to the authorities without delay. 4MLD introduces a requirement for the disclosure of any relevant information for transactions exceeding established thresholds, which are not currently contemplated in the Spanish legislation.

The Directive requires relevant documents to be kept for at least five years (Article 49), but enables Member States to adopt a more restrictive approach. The Spanish legislation currently extends that requirement to a period of at least ten years.