New EU rules to tackle terrorism financing, tax avoidance and money laundering

On 5 July 2016, the European Commission (the “Commission”), adopted a proposal to further reinforce EU rules on anti-money laundering to counter terrorist financing and increase transparency about who really owns companies and trusts.

According to the Commission, this proposal is the first initiative to implement the action plan for strengthening the fight against terrorist financing (the “Action Plan”). The Action Plan proposes changes to prevent the financial system from being used for funding terrorist activities and is also part of a broader drive to boost tax transparency and tackle tax abuse. With regard to countering terrorism financing, the Action Plan addresses, among other issues:

  • Enhancing the powers of EU Financial Intelligence Units and facilitating their cooperation;
  • Tackling terrorist financing risks linked to virtual currencies;
  • Tackling risks linked to anonymous pre-paid instruments; and
  • Stronger checks on third countries.

The Action Plan also proposes stricter transparency rules to prevent tax avoidance and money laundering. This includes:

  • Full public access to the beneficial ownership registers;
  • Interconnection of the registers; and
  • Extending the information available to authorities.

The Commission proposal aims to reinforce the measures introduced by the Fourth Anti-Money Laundering Directive as adopted on 20 May 2015. The proposed changes aim to address both terrorist financing and transparency issues under the existing framework. The European Commission calls on Member States to bring forward the date for effective transposition of the Fourth Anti-Money Laundering Directive by the end of 2016.

The official press release from the Commission can be found here.

The Commission Action Plan can be found here.

Would you like to stay updated and receive our newsletters and legal alerts?

Please subscribe below and we will add you to our mailing list.