Fourth European Union Directive on money laundering requirements

C

The Fourth European Union Directive on Money Laundering (4AMLD) is an important regulatory framework aimed at preventing and combating money laundering and terrorist financing within the European Union. The directive was adopted on May 20, 2015, and became effective on June 26, 2017. Among other things, 4AMLD requires financial institutions and other designated non-financial businesses and professions (DNFBPs) to implement risk-based anti-money laundering (AML) policies, procedures, and controls to detect, prevent, and report suspicious activities.

Out of the options provided, the requirement included in the Fourth European Union Directive on money laundering that relates to maintaining registries of beneficial owners of legal entities is option C. Specifically, the Directive mandates that member states must establish centralized registers of beneficial ownership information on legal entities operating within their respective territories. The information contained in these registers is intended to help enhance transparency, prevent money laundering, and support the investigation and prosecution of financial crimes.

Option A, which requires obliged entities to consider politically exposed persons (PEPs) as high risk for life, is not a specific requirement of 4AMLD. However, the Directive does mandate that obliged entities conduct enhanced due diligence (EDD) on customers who are PEPs or who have close business relationships with PEPs.

Option B, which requires obliged entities to conduct enhanced due diligence on all prepaid card holders, is not a specific requirement of 4AMLD. However, the Directive does mandate that obliged entities conduct EDD on customers who purchase or use prepaid cards that can be used to conduct anonymous transactions.

Option D, which requires member states to enact economic sanctions against countries that do not cooperate with Financial Action Task Force (FATF) recommendations, is not a specific requirement of 4AMLD. However, the Directive does mandate that member states comply with the FATF's recommendations on AML/CFT and implement appropriate measures to address the risks associated with high-risk third countries.