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Impact of the 5 AML Directive on the crypto industry

Impact of the 5 AML Directive on the crypto industry

The transitional period allotted to the EU Member States according to the Fifth Directive of the European Parliament and the Council on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing (hereinafter – the 5th AML Directive) is coming to an end. The deadline for the enforcement of the laws, regulations and administrative provisions necessary to comply with all the provisions of this Directive is January 10, 2020.

Innovations of the fifth edition of the AML Directive for crypto business

  1. There was defined the term “virtual currencies”. By this term is meant a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically.
  2. Crypto exchanges and e-wallet providers are recognized as “obliged entities” and must conduct verification of their customers, as well as inform the relevant authorities about suspicious transactions.
  3. The national Financial Intelligence Units of the EU countries gain more authority to monitor cryptocurrency activities. In particular, the Financial Intelligence Units can receive information about the owners of cryptocurrencies, as well as information about suspicious transactions from persons who voluntarily provided it.
  4. Conversion of previously created registries of ultimate beneficial owners of the legal entities, including trusts, into public (accessible not only to competent authorities). Moreover, the registers of the EU countries should be interconnected at the Union level for convenient and efficient use. The lists of the ultimate beneficial owners of the bank accounts should be created separately.They will be available only to government bodies.
  5. Reducing the monthly limit of prepaid cards from 250 euros to 150 euros.
  6. Member States should compile registers of the Politically Exposed Persons positions with criteria for identifying a person as a politically exposed. These persons are subject to special control during transactions.
  7. Relations with companies registered in high-risk countries should be subject to special control by the companies interacting with them and the supervisory authorities. The list of countries will be approved by the European Commission.

 

How to prepare for the entry into force of the 5 AML Directive

Companies from the EU shall align their AML policies and AML strategies, conduct training for responsible employees, and review the nature of their relationships with partners. As a result, you will get a representative company with a strong AML policy, as the requirements of the EU are considered as one of the most advanced and comprehensive.

Don’t be afraid of changes. The Mayon Solutions team is always ready to help you. We will help you to develop the AML policy taking into account all legal provisions and features of your activity, explain you the ways to improve the AML verification process and much more.

Our long-term experience in the field of registration of international companies, opening of bank and merchant accounts, as well as licensing, will help to choose the optimal solution especially for you.

 

Contact us right today, there is very little time left until the 10th of January!

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