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EP pushes for public access to data in fight against money laundering

Under proposed amendments, registers of beneficial owners of companies would be available to the public without a ‘legitimate interest’, and trusts would have to meet the same transparency requirements as firms

jeanelle_mifsud
Jeanelle Mifsud
28 February 2017, 4:21pm
The new measures aim to streamline coordination among member states
The new measures aim to streamline coordination among member states
Proposed amendements to the EU’s Anti-Money Laundering Directive would enable EU citizens to access beneficial ownership registers without having to demonstrate a “legitimate interest” in the information, as is currently required.

The requirement currently restricts access to authorities and professionals, such as journalists and lobbyists.

Two European parliamentary committees have agreed on the amendments, that would “plug gaps” in the EU’s framework legislation against money laundering and terrorism financing. The amendments, agreed by the economic and monetary affairs and civil liberties committees, would also introduce stricter transparency rules to prevent tax evasion, according to a statement by the European Parliament.

“Complex company structures and shelf companies make it easy for people to hide money. Through a public register for companies and trusts, the European Parliament wants to shed light on these structures and thereby combat them," Judith Sargentini, a co-rapporteur on the file, said.

The committees also agreed to expand the scope of the Anti-Money Laundering Directive to include trusts and “other types of legal arrangements having a structure or functions similar to trusts,” which were previously excluded from the directive on privacy grounds.

Under the amendments, trusts will now have to meet the full transparency requirements of firms, including the need to identify beneficial owners. 

Despite virtual currencies accounting for only a small share of global financial transactions, some EU member states and the European Banking Authority have said that they pose risks. Therefore the committees agreed to include virtual currency platforms and custodian wallet providers within the scope of the directive, giving them the same obligation to scrutinise their customers as banks and other payment institutions.

About 70, 000 virtual currency transactions are made daily, according to the European Central Bank.

The MEPs also moved to lower the threshold at which identification requirements kick in for anonymous pre-paid instruments, from €250 to €150, in a bid to discourage people from sing them as a low-cost, convenient way to transport the proceeds of crime.

According to the European Parliament, the new measures aim to streamline coordination among member states, and include introducing centralised bank and payment account registers, harmonising the checks that banks and financial institutions make across the EU and easing the flow of information between member states’ financial intelligence units. 

Alternattiva Demokratika chairperson Arnold Cassola said that the party welcomed the revision, saying that it will make it more difficult for people to open up shelf companies and obscure trusts.

Green MEP Sven Giegold said that the proposals show that MEPs have backed “better control of the middle-men who make these crimes possible.”

"In so many of the tax dodging scandals of recent years, poor enforcement has been as much of a problem as poor legislation. Our proposal … would grant the European Commission the power to audit member states' relevant authorities to make sure they are enforcing the rules and to stop further scandals happening," Giegold said.

The amended report was passed by 89 votes to one, with four abstentions.

In March, the European Parliament as a whole must now give the green light in a plenary session for MEPs to start three-way talks with the EU Commission and Council.