New standards on anti-money laundering and terrorist financing

On 16 February FATF (Financial Action Task Force [1]) adopted revised international standards aimed at increasing the effectiveness of regimes to counter money laundering and terrorist financing. The European Commission will now have to ensure that the FATF standards are implemented in the EU, through the revision of its 2005 Directive. The issue of anti-money laundering legislation is very important in the property sector as a whole and CEPI looks forward to taking an active part in the discussions concerning the revision of the Directive.

The main changes to the international standards are the introduction of a risk-based approach (those countries more at risk must do more), improved transparency, more effective international cooperation, identification of clear operational standards and the addition of new threats and priorities to be covered.

To ensure that the FATF standards are implemented in the EU, the European Commission will review the Third Anti-Money Laundering Directive, which has been in force since 2005, and is based on the international standards. The Directive applies to the financial sector, lawyers, notaries, accountants, real estate agents, casinos and company service providers, and all providers of goods involving cash payments of more than €15.000.

Those subject to the Directive need to identify and verify the identity of their customer, and to monitor transactions, report suspicions of money laundering or terrorist financing to the public authorities and take supporting measures such as staff training and the establishment of internal preventive policies and procedures.

The consultation process on the revision of the Directive has already started and at the end of March the Commission is due to publish a report on the application of the Third Anti-Money Laundering Directive. This will be followed by an impact assessment and the publication of a revised directive which is planned before the end of 2012.

[1] The Financial Action Task Force sets global standards for measures to combat money-laundering and terrorist financing. It is an intergovernmental body with 36 members including the European Commission and 15 EU Member States.