What Is AMLD5?

AMLD5, implemented in 2020, mandates enhanced customer due diligence, transparency in beneficial ownership, and expanded regulation to combat money laundering and terrorist financing.

Oct 18, 2024 at 03:06 am

What is AMLD5?

The 5th Anti-Money Laundering Directive (AMLD5) is a piece of European Union legislation aimed at preventing and combating money laundering and terrorist financing. It was adopted in May 2018 and came into force in January 2020.

Key Features of AMLD5

AMLD5 introduced a number of new requirements for businesses and individuals involved in financial transactions, including:

1. Enhanced customer due diligence (CDD): Businesses are now required to conduct more thorough CDD checks on their customers, including verifying their identity and source of funds.
2. Increased transparency of beneficial ownership: Businesses are now required to obtain and hold information on the beneficial owners of their customers. This information must be made available to law enforcement and other competent authorities upon request.

3. Expanded scope of regulated activities: AMLD5 now applies to a wider range of financial activities, including:

   • Cryptocurrency exchanges
   • Dealers in precious metals and gemstones
   • Providers of gambling services
4. Increased penalties for non-compliance: Member states are required to impose effective, proportionate, and dissuasive penalties on businesses that fail to comply with AMLD5 requirements.

Impact of AMLD5

AMLD5 has had a significant impact on businesses and individuals across the EU. It has increased the cost of compliance for businesses and made it more difficult for criminals to launder money. However, it has also helped to strengthen the EU's anti-money laundering framework and make it more difficult for terrorists to finance their activities.

Conclusion

AMLD5 is a key piece of legislation in the EU's fight against money laundering and terrorist financing. It has introduced a number of new requirements for businesses and individuals involved in financial transactions, and has had a significant impact on the way that money is laundered in the EU.