Is your financial institution operating in the EU, Liechtenstein or Switzerland? Are you personally a Board member, Senior executive or even a member of middle management within Legal and Compliance? Then you should get updated about the new Union AML framework and figure out the safe way forward. We can assist you on your journey, especially advising the banking sector on concrete measures to comply with the AMLD6, while the clock is ticking.<\/p>\n
1. Why is the basic change needed in spite of a 30-year continues development of AML\/CFT in Europe?<\/strong><\/p>\n The concept of the AML\/CFT laid down in June 1991 by the EU Council Directive (AMLD1) was based on three pillars, which are still holding today:<\/p>\n This was basically all, for the first decade, until the Second AML Directive brought the necessity of Face-to-Face customer identification and first hints for the Risk-Based Approach (RBA) — in December 2001. Some proposals, room for improvement areas for the current AML\/CFT include:<\/p>\n <\/p>\n 2. Criminal and Regulatory enforcement of AML legislation in Europe<\/strong><\/p>\n While Suspicious Activity Reporting is in distress in EU, it can be addressed by the practice that focuses more on quality rather than quantity.<\/p>\n Complete documentation of all steps in AML matters is crucial to enable defence (e.g., initiation of internal investigation or for which transactions bank files SARs as a result of media reports) <\/p>\n 3. The new EU AML Framework<\/strong><\/p>\n The Commission published a legislative package on AML on 20 July 2021:<\/p>\n o EU single rulebook on AML\/CFT Probable practical implications, based on the Commission Action Plan of 7 May 2020 and 20 July 2021 Package — 4 proposals:<\/p>\n When will the AML\/CFT package enter into force?<\/p>\n Focus: Cash<\/p>\n\n
\nThe Third AML Directive came into action in 2005, when the Complexity explosion brought first \u2013 Introduction of RBA, Concept of UBO (ultimate beneficial owner) and KYC developed to CDD (customer due diligence), where the verifying of the customer\u2019s identity on basis of documents, data or information obtained from reliable and independent sources was added.
\nThe Fourth AML Directive in 2015 saw a Complexity explosion for the second time \u2013 imposing specific rules on Trusts and implementation of UBO registers.
\nThe Fifth AML Directive of 2018 imposed in its turn \u2013 Stricter rules on high-risk countries and legalised the Recognition of electronic identification.
\nThe ongoing challenge, however, appears to be — that the total number of SARs (Suspicious activity reports) filed to authorities in the EU on an annual basis has grown from 590\u2019762 in 2009, to 960\u2019463 in 2014, or by 61,5% (Europol data from 2017), During the same period, while only 1,1% of criminally obtained assets were confiscated. Just over 10% of the SARS are estimated as useful to EUL law enforcement and are further investigated after collection, a figure that is unchanged since 2006.
\nPublic Prosecution authorities in the EU member states have admitted, that basically \u2013 \u201cthe bigger the bank, the more SARS and more scrap\u201d and \u201cThere are a lot of reports and we have difficulties processing them. We are at the absolute limit with our capacities.\u201d
\nConclusions to the recently existing AML\/CFT regime was:<\/p>\n\n
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\nIncreasing prosecution of individuals:<\/p>\n\n
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\no Regulation to create a new AML\/CFT supervisory authority at EU level<\/p>\n\n
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