Stronger Rules on Anti-Money Laundering

On 5 February the European Commission published its proposal to strengthen the existing EU rules on anti-money laundering in the revision of the Third Anti-Money Laundering (AML) Directive. These rules are of great interest to the real estate sector. CEPI welcomes the fact that the Commission has answered CEPI and CEI’s request to extend the right for self-regulatory bodies to monitor and ensure compliance to estate agents. This will enhance the role which qualifying professional bodies can play and promote cooperation. It also means that estate agents are now included on the same terms as other professionals in the legislation.

The proposal for the revision of the AML Directive was published together with a regulation on information accompanying transfers of funds to secure “due traceability” of these transfers. The intention is to update the EU legislative framework taking account of the revised international standards published by the Financial Action Task Force (FATF) in February 2012.

In particular the proposed revised directive:
• Includes letting agents (as well as estate agents) amongst the obliged entities.
• Adopts a targeted and risk-based approach.
• Provides a clear mechanism for the identification of beneficial owners. Companies will be required to maintain records as to the identity of those behind the company.
• Reinforces rules on customer due diligence requiring a better knowledge of customers. Enhanced due diligence must be conducted in high risk situations, with simplified due diligence being permitted in situations of lower risk (but not as a full exemption).
• Expands the definition of politically exposed persons (who may represent higher risk by virtue of the positions they hold such heads of state, members of government or parliament and judges) to include persons resident in EU Member States in addition to those residing abroad.
• Extends its coverage of the gambling sector and includes explicit reference to tax crimes.
• Brings within its scope all persons dealing in goods or providing services for cash payment of €7,500 or more. Such persons will now need to carry out customer due diligence, maintain records, have internal controls and file suspicious transaction reports.
• Strengthens cooperation between the different national Financial Intelligence Units which receive, analyse and disseminate to competent authorities reports about suspicions of money laundering or terrorist financing.
• Imposes minimum principles-based rules on sanctions including pecuniary sanctions for natural persons of up to €5,000,000.

The proposed directive provides for minimum harmonisation so that Member States will be able to go further in their own requirements. The proposals will now be examined by the European Parliament and Council. The European Commission will be holding a conference on 15 March at which these proposals will be debated and presented further.

Further information about the proposals is available at