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New EU Rules On Money Laundering, Tax-Avoidance In Force

by Ulrika Lomas,, Brussels

27 June 2017

The EU's Fourth Anti-Money Laundering Directive, intended to crack down on tax avoidance and money laundering, entered into force on June 26.

The Directive is designed to reinforce existing rules by tightening a range of requirements. For instance, it sets clear transparency requirements about beneficial ownership for companies. The information gathered will be stored in a central register, and will be available to national authorities and obliged entities.

In addition, the Directive aims at facilitating cooperation and the exchange of information between Financial Intelligence Units operating in different member states, to identify and follow suspicious transfers of money and prevent and detect crime or terrorist activities. It also reinforces the risk assessment obligation for banks, lawyers and accountants, along with the sanctioning powers of competent authorities.

Frans Timmermans, First Vice-President, said: "Laundered money is oxygen to crime, terrorism, and tax avoidance. We need to cut off its supply as best we can. Today's stronger rules are a big step forward but we now need quick agreement on the further improvements the Commission proposed last July."

In July 2016, the Commission recommended that the scope of information accessible to Financial Intelligence Units be widened, and that the list of checks applicable to countries with deficiencies in their anti-money laundering and counter-terrorist financing regimes be harmonized. It also proposed that full public access be granted to beneficial ownership registers, and that existing, as well as new, accounts be subject to due diligence controls.

This package is currently in the negotiation stage in the Council and European Parliament. The Commission called for work to be finalized as soon as possible, so that the proposed new rules can enter into force quickly.

TAGS: compliance | tax | European Commission | tax compliance | tax avoidance | law | tax authority | revenue statistics | European Union (EU) | Europe

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