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The directive on anti-money laundering and prevention of terrorist financing

The Council approved on 10 February 2015 the political agreement on the fourth anti-money laundering directive, AMLD4. The AMLD4 includes strengthened rules to combat money laundering and the financing of terrorism and gives new tools for the use of member states to enhance the integrity, stability and reputation of the financial sector in the EU.

Central register on companies’ beneficial ownership
The Directive includes provisions on establishment of a central register on companies’ beneficial ownership. Companies and other legal entities are required to obtain, hold and transmit to a central register adequate, accurate and up-to-date information on them and on their beneficial ownership. The beneficial ownership definition covers both a direct and indirect ownership of 25 percent in minimum.

- They set out the list of minimum information that must be kept in the register to clearly identify the company and its beneficial owners. The minimum information includes shareholders name, month, year of birth, nationality, country of residence and the nature and extent of beneficial interest held, says Kati Honkajuuri-Kokkonen, the Head of Legal & Public Affairs from Euroclear Finland.

The central register will be accessible to authorities, obliged entities such as banks and investments firms and also to the public, such as investigative journalists and other concerned citizens.

- UK, France, Denmark and the Netherlands have signaled that they are planning to make their registers fully accessible to the public, clarifies Honkajuuri-Kokkonen.

Towards more transparent ownership
The Directive is yet another step in the long line of regulatory initiatives pushing towards transparent holding and better information on company ownership.

The 2014 G20 principles encourage countries to ensure that legal persons maintain adequate, accurate and current information on their beneficial ownership. Relevant authorities such as tax authorities and financial intelligence should have timely access to the information.

Access to owner information is also in focus in the upcoming amendment to the shareholder rights directive. The amendment enhances companies’ right to identify their shareholders and clarifies the obligation for intermediaries to provide information on shareholders without undue delay. It furthermore requires that member states ensure that a company is able to obtain information regarding shareholder identity from intermediaries. Member States may also decide that the CSD collects the information.

Next steps
The AMLD is expected to enter into force in May-June 2015. The government proposal implementing the AMLD in Finland is expected to be given in spring 2016, coming into force early 2017. 

The original article was published on 30 April on Euroclear Finland's newsletter.

For further information please contact
Kati Honkajuuri-Kokkonen
Head of Legal & Public Affairs

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