Steps to Detect and Mitigate Money Laundering Risks

On 14 May 2018, EU member states adopted the 5th Money Laundering Directive (5MLD),featuring several key updates to the requirements set out by the far-reaching 4th Money Laundering Directive (4MLD). 5MLD must be implemented by member states by early 2020.

The primary objective of 5MLD is to increase transparency into often opaque financial activity that slips past current Know Your Customer (KYC) checks. To prevent the misuse of the world’s financial system, financial institutions need deep insight into who they are doing business with. The directive encourages firms to have robust KYC methodologies as well as efficient customer due diligence programs in place to close the door on individuals who want to hide their identity.

The Fourth EU AML Directive, enacted on 25 June 2015 and which went into effect on 26 June 2017 is one of the most significant AML legislations in Europe in several years. The Directive is focused on improving the consistency of AML rules across all EU Member States and more prescriptive regarding the factors necessary to demonstrate that they have taken the appropriate steps to identify, assess, understand and mitigate money laundering or terrorist financing risks. This includes:

  • More specific ongoing monitoring measures
  • Increased beneficial ownership transparency
  • More specific customer due diligence requirements
  • Expanded definition of politically exposed persons
  • Lowering of the payment threshold to €7,500
  • Expanded jurisdiction to include entire gambling sector beyond just casinos and
  • Enhanced risk-based approach, requiring evidence-based measures.

Compliance Made Easy

Opus can help you comply with these regulations with both our Data Solutions that facilitate the cross-referencing and mapping of entity data to help verify the identity of customers and beneficial owners. And Clarity KYC solutions, our online workflow and surveillance tools for KYC/AML compliance.