In previous articles, we have dealt with the specific characteristics of the fifth anti-money laundering Directive (5AMLD or AML5).
In this article, we will discuss its evolution since the publication and the current situation that organizations, businesses, and institutions are facing.
5AMLD Deadline: 02/10/2020
5AMLD was published in the Official Journal of the European Union on June 19, 2018. Since then, and until January 10, 2020, all member states have worked in order to adopt 5AMLD Directive (or AML5) in their national legislations with accuracy and effective application.
All countries have the obligation to incorporate the new Directive into their legal rules within this 18-month period, imperiling themselves to serious sanctions if they have not done so by that date. If not, EU Commission initiates an infringement procedure or takes the country to CJEU in order to sanction the infringing state economically and socially.
All organizations, companies and institutions must establish their KYC (Know Your Customer) processes to ensure strict compliance with the fifth Anti-Money Laundering Directive (AMLD) passed on January 10, 2020 if they do not want to be sanctioned by fines up to 5 million euros, 10% of their annual turnover or their activity’s suspension.
AML5 was developed even before many member states had incorporated 4AMLD (or AML4). Having January 10, 2020 as the key horizon for the final application of 5AMLD, the EC is already preparing its successor, the sixth anti-money laundering Directive (6AMLD or AML6).
Countries, organizations, companies, and institutions that operate in this market must work hard to apply all AML regulations in constant development so as not to be sanctioned.
However, 5AMLD regulation not only focuses on sanctions but on the transformation of KYC processes to comply with the standards and procedures proposed by AML and eIDAS regulations.
Adopting these rules brings great benefits to companies, accessing millions of new potential customers in a much easier, regulated, simple, immediate and automated way.
Download here a simple guide on how 5AMLD is changing the market and boosting business.
Most important changes
Among the changes introduced by 5AMLD versus 4AMLD, the most notable are:
- The obligation of the specific and complete identification of the real holders of passbooks, bank accounts or e-wallets that, until now, could be anonymous, affecting the entire banking and financial sector, both in traditional and online banking.
If you want to know in-depth about how AML Directives are remodeling bank onboarding processes, visit this article.
- Expanding the list of required subjects, including providers of services related to virtual currency exchange and crypto-currencies, e-wallet service providers and art dealers or intermediaries in this sector.
- A great improvement is expected in registration processes of holders and trusts to delve into what has already been established in AML4, specifying procedures and establishing rules for new security standards.
Crypto-currencies in 5AMLD
The implementation of 5AMLD constrains services in relation to traffic and use of crypto-currencies.
As we have seen, the new AML regulation introduces within its main changes the obligation to verify the identity of all users who make use of these virtual currencies. KYC processes,occasionally forgotten in these environments become mandatory and must comply with all AML regulations and establish guidelines for verifying users at a high-security standard.
Thus, service providers of use, transfer, exchange and management of both crypto-currencies and electronic wallets must take action to verify all users with identification solutions.
Our 5AMLD solutions
Electronic IDentification (eID), accompanies you in the implementation of trust services (Video IDentification, Authentication, and Electronic Signature) to reduce costs in your customer acquisition process, while improving their user experience and complying with the most demanding legal regulations, such as AML5. Done in a matter of seconds thanks to AI and from any device and channel.
If you want to know in detail and in a practical way how our solutions can help in this new scenario, feel free to request a demo.