Out-Law News | 13 Mar 2014 | 10:53 am | 2 min. read
MEPs have approved proposals of the anti-money laundering directive (AMLD) which is designed to "make dodgy deals harder to hide and fight tax evasion", a European parliament statement said.
The proposals would also require banks, auditors, lawyers, real estate agents and casinos to be more vigilant about suspicious transactions made by their clients.
"Today is a good day for law-abiding citizens, but a lousy day for criminals", said Economic and Monetary Affairs Committee rapporteur Krišjānis Kariņš, following the vote this week.
Beneficial owners are the individuals who ultimately own an investment, rather than simply hold it on behalf of the real owner. The AMLD is designed to prevent criminals from owning investments anonymously and to clamp down on some of the €600 billion a year authorities estimate is laundered worldwide to fund terrorist or criminal activities or to evade taxes, said European Voice. Koen Roovers, EU advisor for the for the Financial Transparency Coalition, told newspaper: "The current system has bred a vast network of anonymous shell companies, which are used to funnel money that's been gained through illegal practices, or embezzled from a government's coffers."
Under the proposals, each EU country would develop a public central register listing information on the ultimate beneficial owners of all sorts of legal arrangements, including companies, foundations, holdings and trusts. The registers would be interconnected across the EU and would be "publicly available following prior identification of the person wishing to access the information through basic online registration," MEPs said.
MEPs have inserted a number of provisions to the draft legislation designed to protect data privacy. For example, registers would show who is behind a given trust, but would not reveal details of what is in it or what it is for, a statement by the European parliament said.
The proposed rules would also require banks, financial institutions, auditors, lawyers, accountants, tax advisors, casinos and real estate agents, among others, to be more vigilant about suspicious transactions made by their clients.
The parliament described the amended AMLD as measures which provide for a "risk-based approach, enabling member states to better identify, understand and mitigate money laundering and terrorist financing risks."
This week's endorsement by the parliament follows approval by the European Parliament's Economic Affairs Committee and the Justice and Home Affairs Committee in February this year. Commenting on the AMLD at that time, Karins said: "For years, criminals in Europe have used the anonymity of offshore companies and accounts to hide their financial dealings. Creating an EU-wide register of beneficial ownership will help to life the veil of secrecy from offshore accounts and greatly aid the fight against money laundering and blatant tax evasion."
The legislation will now go before the new parliament following the European elections in May.
The AMLD mirrors similar measures which are being developed in the UK by the government. In July last year A discussion paper published by the Department of Business, Innovation and Skills (BIS) sets out how the UK will implement its G8 commitment to a central registry of companies' beneficial owners.