Helping Regulated Firms Prepare for the 5th Money Laundering Directive

The new EU 5th Money Laundering Directive (“5MLD”) will come into force in January 2020 and will apply to all regulated firms subject to EU regulation.

Being prepared for these changes, which follow the recent 4th Money Laundering Directive(“4MLD”), will enable firms to conform to the requirements seamlessly and will ensure compliance with the new regulations.

5MLD extends the remit of 4MLD to:

  • A broad range of auditors, external accountants and tax advisers

  • The letting activities of estate agents where the monthly rent is €10,000 or more

  • Providers of virtual/fiat currency exchange services

  • Custodian wallet providers

  • A broad range of activities relating to the trade in works of art worth €10,000 or more

  • The limit that excludes electronic money from CDD requirements is reduced to €150 without exception with a €50 withdrawal limit.

To conform to the new requirements, firms must ensure:

  • All policies and procedures are in-line under 5MLD

  • All staff are trained up on and are familiar with the new requirements by 2020

  • Maintain a list of High Risk 3rd countries to enable EDD to be applied to all customers in these jurisdictions

  • All systems and controls are aligned to the new requirements.

Lysis has worked with a wide range of financial institutions, professional services firms and estate agency businesses to implement 4MLD and establish risk frameworks and operating models for AML compliance and efficient customer on-boarding. We have also worked with cryptocurrency firms to design and implement Anti-Money Laundering and Sanctions Governance Frameworks.

We can help firms prepare for 5MLD by:

  • Conducting a comprehensive assessment of current compliance with the existing anti-money laundering regulations

  • Providing a current and future state AML Maturity Assessment of a firms’ AML and financial crime strategic and operational capability

  • Reviewing business lines to assess the impact 5MLD will have on operations

  • Designing a roadmap which will monitor change and ensure compliance to the new directive, providing assurance and oversight to key stakeholders

  • Designing an operating model that will support efficient customer on-boarding whilst remaining compliant with AML regulation

  • Gather information on the ‘obliged entities’ in readiness for complying with the requirement for updating the beneficial ownership databases.

Through Lysis Academy, we can also provide AML / KYC training that includes the latest regulatory updates, such as 5AMLD.