On May 14, a Delegated Regulation ((EU) 2019/758) supplementing the Fourth Money Laundering Directive ((EU) 2015/849) (MLD4) with regulatory technical standards (RTS) specifying the minimum action and the type of additional measures credit and financial institutions must take to mitigate money laundering and terrorist financing risk in certain third countries was published in the Official Journal of the EU (OJ).
Article 45 of MLD4 sets out requirements for the implementation of group-wide policies and procedures for anti-money laundering (AML) and countering the financing of terrorism (CTF). Where the law of a third country does not allow implementation of group-wide policies, Article 45(5) states that firms must ensure that their branches and majority-owned subsidiaries in that third country apply "additional measures" to handle effectively the risk of money laundering and terrorist financing. This may occur, for example, when the sharing of customer-specific information within the group conflicts with local data protection or banking secrecy requirements. The RTS specify the additional measures that firms should take to comply with Article 45(5).
The Delegated Regulation will enter into force on June 3. It will apply beginning September 3.
The Commission adopted the Delegated Regulation, which reflects a mandate in Articles 45(6) and 45(7) of MLD4, on January 31.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.