Incidents such as human trafficking, terrorism, and the Middle East migration crisis since complying with the EU 4th Anti-Money Laundering Directive have revealed the necessity of new measures to anti-money laundering and financing terrorism.
Toward all of them, the European Parliament complies with the 5th EU Anti-Money Laundering Directive on 19 April 2018. The changes were aimed to find out the criminal financial activities and terrorist financing.
Since complying with the EU 4th Anti-Money Laundering Directive, incidents such as human trafficking, terrorism, and the Middle East migration crisis have revealed the need for new measures to combat money laundering and terrorist financing.
In line with new regulations, developing technology and trends, legal regulations for financial activities, corporate and other legal entities had to be clear and more understandable. This explicitly would make it easier to improve the current preventive framework and combat terrorist financing.
5AMLD aimed to detect money laundering and prevent it. In this context, stricter rules have been introduced to fight money laundering and terrorist financing more effectively. Besides, the number of organizations also obliged to comply with AML Regulations has been increased.
With the development of technology, virtual money took its place in the economic cycle. Although 5th AMLD was designed to improve 4th AMLD, some additions needed to be made. The main measures taken against crypto assets under 5AMLD are as follows:
Anonymous prepaid cards are one of the factors that facilitate money laundering and terrorist financing activities. Through prepaid cards, criminals can access substantial amounts of money. 5AMLD requires the implementation of customer due diligence measures. It also introduced a limitation for payment instruments monthly.
Check out our content to better Understand the Risk of Money Laundering on a Prepaid Card.
With 5AMLD, obligations for financial crimes and tax evasion become more clear than from previous legislation. Also, legislation reviews of the member states were expanded. Other decisions taken to broaden the scope of legislation are: