Effects of amendments to AML regulations under harmonization with EU law

On the 18th of June, the Committee of Permanent Representatives (COREPER) at the Council of the European Union agreed its position regarding the contents of the first reading of IV AML Directive package discussed in March. Therefore, in near future we may expect the final version of the Directive to be issued along with the date of transposing it to local legal systems and the effective date. The expected implementation deadline is January 2016.

The document will bring a number of material changes, on the one hand introducing requirements regarding more rigorous solutions, on the other hand, certainly increasing the importance of AML issues in financial sector institutions.

In our previous memos, we attempted to describe changes to be introduced once the new regulation comes into force, among others with regard to:

1) The beneficiary

2) Electronic money

3) Determining the list of high-risk countries on the EU level

4) Changes in compliance supervision

5) Amendments to risk assessment principles for financial institutions

The vigorous and carefully directed actions of regulators make corporate management much more focused on regulatory compliance than in previous periods. Understanding of regulations, selected compliance management measures or even expenditures on compliance management still vary among representatives of financial institutions.

Client verification procedures, including identifying of the beneficiary, incorrect determining of risk groups for clients or even inappropriately collected evidence for the purpose of possible regulatory control remain frequent problems faced by financial institutions. Certainly, subsequent changes aimed at achieving compliance with 4th AML Directive will pose a substantial challenge for financial institutions, as Rafał Turczyn has pointed out.

But only the Directive in its final version that will underlie subsequent compliance analyses will allow precise determination of objectives and adjustment measures in financial institutions. We will keep you updated on deadlines regarding the passing of technical standards, the Directive itself and their contents.

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