Compliance

5th EU Anti-Money Laundering Directive

Published on 19 June 2018 in the Official Journal of the European Union (OJ L156, 19.06.2018), the Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, amends the Directive (EU) 2015/849 (also known as the Fourth Directive) on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing, as well as the Directives 2009/138 / EC and 2013/36 / EU.

This Directive sets out a comprehensive and effective legal framework to combat the collection of goods or money for terrorist purposes by requiring Member States to identify, understand and mitigate money laundering and financing of terrorism.

This new directive is a set of rules of UE to combat money laundering, tax evasion and financing of terrorism. This is the result of the action plan launched following the wave of terrorist attacks in Europe in 2016. Its objective is to combat the financing of crime without creating obstacles to the normal functioning of the payment systems. It reinforces existing rules by introducing the following changes:

  • Virtual currencies: All virtual currency exchange platforms and digital wallet holders are required to conduct rigorous due diligence to counter the growing risk of money laundering when dealing with digital currencies;
  • Prepaid cards: to reduce the financial crime associated with anonymous prepaid products, suppliers must conduct a strict verification by customers, which goes from 250 euros to 150 euros;
  • High risk countries: Banks need to be more vigilant about financial transactions in high-risk countries, including the non-EU countries with insufficient controls;
  • Increased powers for Financial Intelligence Units (FIUs): FIUs will have access to the central bank information and to the payment account registers to improve the identification of account holders;
  • Access to beneficial owner registers: national registers and the exchange of information between EU Member States will provide a higher degree of transparency for business owners.

UN Conventions

goAML/goPortfolio supports UNODC’s Mandates:

 

  • UN Conventions:

    • Transnational Organized crime (UNTOC)
    • Corruption (UNCAC)
    • Suppression of Terrorism Financing
  •  UN Security Council Resolutions
  •  UN General Assembly Resolutions

Financial Action Task Force (FATF)

The Financial Action Task Force (FATF) is an intergovernmental organization and was set up by the G7 in 1989 to combat money laundering and terrorist financing. FATF set forth 40 recommendations for its members which relate to preventive regulatory, operational and legal measures that include but are not limited to reporting entities obligations to report and measures to improve national and international AML/CTF regimes and international cooperation. Mutual evaluations are conducted on an ongoing basis to ensure members implement these recommendations.

FATF Recommendations are recognized as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction, and other threats to the integrity of the financial system. Notably, the Recommendations provide standards and requirements for countries to establish financial intelligence units (FIUs) and ensuring FIUs are equipped and have both the infrastructure and capabilities to receive and analyze suspicious transaction reports and other information relevant to money laundering, associated predicate offences and terrorist financing, and for the dissemination of the results of that analysis to law enforcement and investigative authorities.

The United Nations Office on Drugs and Crime (UNODC) has an observer status with the FATF due to its mandate being related to specific anti-money laundering functions.

Egmont Group

The Egmont Group adopted guidelines in 2013 to promote the development of FIUs and information sharing. The Principles are in line with the FATF Recommendations: interpretative notes on FIUs (Recommendation 29) and other forms of international co-operation (Recommendation 40) and, upon a foundation of mutual trust, serve as a foundation to encourage international cooperation and information exchange between FIUs. The Principles establish standards and concepts for FIUs sharing and/or receiving requests, data protection and confidentiality as well as channels for the exchange of information (e.g., ESW, FIU.NET).

The maturity model of the Financial Intelligence Unit Information System (FISMM), developed by the Egmont Group, is a comprehensive framework that allows FIUs of different sizes and contexts to assess the maturity level of their IT processes and systems. The FISMM model describes the steps across 15 domains (FD01-FD15) by tracking the progress of these processes as they are defined, implemented, and improved. This framework also contributes to strategy formulation, performance management, process improvement and technology assessment in an FIU environment.

Five types of FIUs (in terms of the size and context of a FIU) have been identified: (a) small FIUs in fragile countries; (b) small FIUs in stable countries; c) average CRFs; d) big data CRFs; e) FIUs that support a distributed community of financial analysts or financial institutions.

GoPortfolio software supports different areas of the FISMM model (FD01-FD13) for all types of CRFs. Through a process from start to finish, the goIDM model supports FISMM domains to meet the requirements of technical infrastructure management systems or the strategic alignment of IT (FD14) and computer security management (FD15).