Focus on risk assessment and corresponding risk based approach
In line with FATF recommendations issued in February 2012, rules on customer due diligence are refined and may vary depending of the risk: enhanced vigilance where the risks are greater, simplified measures where risks are lower. Please note that Regulation CSSF 12-02 already implemented most of the recommendations of the FATF in this respect.
The 4th AMLD contains explicit lists of risk factors to be taken into consideration by obliged entities when performing their internal risk assessment and in particular determining application of simplified or enhanced due diligence measures. Guidelines in this area are also expected from European Supervisory Authorities ("ESAs", i.e. EBA, EIOPA and ESMA) by 26 June 2017.
Supra national and national risk assessment
It may also be noted that, besides the above internal risk assessment (i.e. performed internally by the obliged entities) two other types of risk assessments are foreseen by the Directive: an assessment at EU level to be performed by the Commission and, taking account the latter, a national risk assessment to be conducted by all member states. We estimate that this exercise is likely to provide useful guidance to all entities subject to the Directive when assessing the money laundering risks they face. First report of the Commission is expected by 26 June 2017.
Increased transparency in the identification of beneficial owners
Member States will be required to hold information on the beneficial owners of all corporate and other legal entities incorporated within their territory in a national central register. Competent authorities and entities subject to the Directive will have access to the register, as well as any person demonstrating "a legitimate interest" (term not defined by the Directive). The Commercial register is quoted by the Directive as an example of such register (in Luxembourg, the "Registre de Commerce et des Sociétés").
Tax crimes now within predicate offences
Tax crimes relating to direct and indirect taxes are now expressly considered by the Directive as predicate offences. Although the enforcement of this provision in Luxembourg may require specific legislative changes, the Circular 15/609 on anti-money laundering in tax matters recently issued by the Luxembourg financial regulator ("CSSF") leaves very few doubts on Luxembourg authorities' will to comply with the new framework in order to preserve the good reputation of the Luxembourg financial sector.
Larger scope
The 4th AMLD widens the scope of obliged entities: this is notably achieved by submitting gambling services to the Directive (whether provided in a physical location e.g. casinos and, that's the novelty, by electronic means or any other technology e.g. internet gambling) or lowering the cash transaction threshold for traders in goods (from EUR 15,000 to EUR 10,000). With respect to politically exposed persons (PEPs), the Directive now puts domestic PEPs (in addition to foreign ones) in scope of enhanced vigilance measures.
Customer due diligence waiver for certain e-money products
Taking into account the development of new payment instruments charged with electronic money the Directive foressees the possibility for Member States to waive most of customer due diligence requirements. This measure is however limited to low value non-reloadable e-money products and subject to risk-mitigation conditions such as sufficient transaction monitoring.
Third country policy
With a view to establish a common approach towards non-EU countries that have deficient anti-money laundering and counter-terrorist financing regimes ("high-risk third countries"), the European Commission is now specifically empowered to identify (i.e. to point out) these countries. Beyond a foreseeable "name and shame" effect, the presence of customers originating from a country in this list may put significant burden on obliged entities by requiring additional controls.
