What Is AMLD5?
The Fifth Anti-Money Laundering Directive (AMLD5) is a European Union directive that was adopted in 2018. It aims to strengthen the existing anti-money laundering and counter terrorist financing framework by introducing new measures to prevent money laundering and terrorism financing activities. The AMLD5 requires financial institutions, such as banks, payment service providers, e-money issuers, auditors and accountants to take additional steps when identifying customers or clients who may be involved in criminal activity. This includes enhanced customer due diligence procedures for high risk customers or transactions.
In addition to strengthening customer identification requirements, AMLD5 also introduces stricter rules on beneficial ownership information disclosure and transparency of corporate structures. Financial institutions must now obtain more detailed information about their customers’ ultimate beneficial owners before entering into business relationships with them. Furthermore, they are required to keep records of all transactions involving virtual currencies and prepaid cards issued outside the EU for at least five years after completion of the transaction. These measures are intended to make it harder for criminals to hide their identities behind complex corporate structures while engaging in illegal activities such as money laundering or terrorism financing.