The “Report on the legal, regulatory and supervisory implementation across EU Member States in relation to the Beneficial Owners Customer Due Diligence requirements” analyses EU Member States’ current legal, regulatory and supervisory implementation of the anti-money laundering/counter terrorist financing (AML/CTF) frameworks related to the application by different credit and financial institutions of Customer Due Diligence (CDD) measures on their customers’ beneficial owners. The report sought to identify differences in the implementation of the Directive and to determine whether such differences create a gap in the EU AML/CTF regime that could be exploited by criminals for money laundering and terrorist financing purposes.
Background
1. This paper provides an overview of EU Member States‟ legal and regulatory provisions and supervisory expectations in relation to the application of the Simplified Due Diligence (SDD) requirements of the Third Money Laundering Directive [2005/60/EC](3 rdMLD). SDD means a derogation from the Directive‟s normal customer due diligence requirements in certain situations.
2. The data for this paper was obtained from the EU and EEA supervisors, who are members and observers of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), collectively known as the European
Supervisory Authorities. The paper is based upon EU Member States‟ (MS) current legal and regulatory provisions and supervisory expectations collected by a questionnaire and subsequent discussions and it was collated and analysed by the Joint Committee of the European Supervisory Authorities‟ Sub Committee on Anti Money Laundering (AML Committee).
3. This report focuses on national implementation and understanding of the provisions of the 3rd MLD on CDD measures (Article 7), SDD measures (Article 11), EDD measures (Article 13) and the handling of unusual and suspicious activities and transactions (Article 20) where the customer is a credit or financial institution. The assessment is subdivided into three sections, first the scope and nature of the SDD, second the expected use of equivalence provisions and third the supervisory expectations with respect to the limits of application of SDD in high risk situations.
Detailed report link: here