EU Finally Approves Amendments To Anti-Money Laundering Directive

by Ulrika Lomas, Tax-News.com, Brussels

22 November 2001

It was announced earlier this week that the EU's Council of Ministers has given its approval to the amended anti-money laundering directive which has been in the pipeline for some months. Formal approval was given here in Brussels on Tuesday, and the new legislation is expected to enter into force in approximately eighteen months time.

The EU Internal Market Commissioner, Frits Bolkestein said following the announcement that he welcomed the approval of the final text: 'Once again the EU is setting a new world standard in the fight against the financing of terrorism and organised crime,' he observed. However, he added that he hoped European Union member states would begin implementing the recommendations ahead of the eighteen month deadline.

The new provisions contained in the legislation, which currently only applies to the proceeds of drug-related crime, extend the obligation of member states to combat the laundering of all criminal proceeds. The directive also contains amendments which extend regulatory and reporting obligations to non-financial institutions and professionals, including accountants, auditors, real estate agents, lawyers, and casinos.

However, the new legislation has come under criticism from some quarters, and was held up in the European Parliament over disagreements on whether lawyers should be forced to discard client confidentiality obligations. The Institute of Chartered Accountants in England and Wales has also criticised the directive, likening it to 'using a sledgehammer to crack a nut', and complaining that the rules do not specify what should and should not be reported.

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