Europe proposes new rules on money laundering

The ultimate owners of companies and trusts would have to be listed in public registers in EU countries, under updated draft anti-money laundering rules approved by a specialist committee of the European Parliament last week.

The proposed new rules would be incorporated in the anti-money laundering directive currently being negotiated in the EU. The proposals include:

• Public central registers would list information on the ultimate beneficial owners of all sorts of legal arrangements, including companies, foundations and trusts.

• The draft rules would apply to banks and financial institutions, and also to auditors, lawyers, accountants, notaries, tax advisors, asset managers, trusts and real estate agents. If done intentionally, activities such as converting property, or disguising its true nature, source and ownership, whether in a member state or in the third country, would be treated as money laundering. The same would apply to taking part in or facilitating these activities.

• Where there is a little risk of wrongdoing, due to the limited nature of a financial activity and its low threshold, member states could exclude some activities and people from the scope of the draft law. However, they may also extend its scope to cover cases where there is a high risk of money laundering.

“For years, criminals in Europe have used the anonymity of offshore companies and accounts to hide their financial dealings,” said Krišjānis Kariņš, MEP. “ Creating an EU-wide register of beneficial ownership will help to lift the veil of secrecy from offshore accounts and greatly aid the fight against money laundering and blatant tax evasion".

It is hoped that the European Parliament will vote in favour of the anti-money laundering directive as amended in March so that it can be negotiated with the Commission later on in the year.

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