AMLD5: Bolstering the EU’s Defenses Against Financial Crimes

Since the inception of the first Anti-Money Laundering Directive (AMLD) in 1991, the European Union has been progressively strengthening its regulatory framework to combat money laundering and terrorist financing. The Fifth Anti-Money Laundering Directive (AMLD5) represents a significant step forward in this ongoing battle.

The Evolution of Anti-Money Laundering Directives

With each iteration, from AMLD2 through AMLD4, the scope of application broadened, and the directives became more detailed, especially concerning combating terrorist financing. AMLD4, which was implemented into the Prevention of Money Laundering and Terrorist Financing Act (Wwft) on 25 July 2018, introduced a risk-based approach requiring institutions to conduct comprehensive risk assessments.

Key Changes Introduced by AMLD5

AMLD5, in effect since 21 May 2020, has brought about several notable changes:

• Expansion of the Wwft's scope to include more industries, notably crypto service providers.
• Managers of real estate investment institutions are now obliged to assess tenants when monthly rents exceed €10,000.
• Introduction of the UBO (Ultimate Beneficial Owner) register, enforced from 27 September 2020.
  
  

The Impact of AMLD5 on Crypto-Service Providers

AMLD5 subjects crypto service providers to Wwft rules, requiring them to register with the Dutch Central Bank (DNB). These rules apply to providers offering custodian wallets and exchange services for virtual currencies.

DNB’s Registration Requirement

The DNB mandates registration for crypto service providers operating from the Netherlands. Without registration, these services are prohibited from operation, emphasizing the need for compliance.

Registration Requirements for Crypto Service Providers

To obtain registration, crypto service providers must submit a comprehensive dossier to DNB that includes:

• Company information.
• A detailed business plan.
• Governance and controlled operation strategies.
• Integrity management documentation.
• Files for suitability and reliability assessment for each policymaker.
  
  

Staying Informed and Prepared with Compliance Software

Ruler, a compliance software, ensures that institutions remain informed about changes to the Wwft and other pertinent laws and regulations, facilitating readiness for upcoming changes.

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