AML and KYC Regulations in EU

The first anti-money laundering directive was adopted in 1990 by the European Union. It was based on transparency, develop the criteria for the high-risk third countries, and improve the s for financial transactions. set up central bank account registries or retrieval systems in all Member States;
improve the cooperation between anti-money laundering supervisors and the European Central Bank.

The details of the EU’s anti-money laundering legal framework is as follows;

The Fourth Anti Money Laundering Directive implementation date was 26 June 2017. 4AMLD strengthened criteria for the risk-based approach to money laundering, requiring firms to factor geographic locations, products, services, types of transactions, and delivery channels into their customer risk profiles.

The Fifth Anti Money Laundering Directive implementation date was 10 January 2020. 5AMLD focused on obliged entities, purchase identification, politically exposed persons, accessibility to the public, and mandatory.

The Sixth Money Laundering Directive implementation date is 3 June 2021. 6AMLD will focus on emerging money laundering threats and more details about legal requirements rather than 5AMLD.

Valdis Dombrovskis, the Executive Vice-President of the European Commission (EC), the EU’s executive branch which is also responsible for legislation, revealed in middle January 2020 that the European Commission is taking AMLD5’s implementation very seriously, already drawing up infringement procedures only a month after the January 2020 deadline.

EU has an action plan for making AMLD implementation effective. Directives are downscaling with six pillars that already settle by the EU. These are a single EU rulebook, EU-level supervision, enforcing EU-level criminal law provisions and information exchange, the EU’s global rule, effective application of EU rules, and a coordination and support mechanism for the Member States Financial Intelligence Units. Every single pillar has its own strategies under the headline.