Third Directive

2005/60/EU is based on the FATF 40 recommendations, and was adopted in 2005, to be implemented by 2007.

  • Defined money laundering and terrorist financing as separate crimes, and ensured that the directives covered both

  • Risk based CDD – enhanced CDD for riskier customers

  • Protect employees who report suspicious

  • Collect stats on the SARs, e.g. number filed, follow-up performed, number of cases, prosecutions and convictions

  • Financial institutions must record beneficial owner of accounts held by legal persons i.e. natural persons controlling 25% or more of a legal entity or person

  • Defined PEPs as those in prominent positions and their publically known associates, ceasing to be a PEP after one year of not holding office

It applies to:

  • Credit institutions

  • Financial institutions

  • Auditors, external accounts, tax advisors

  • Legal professional

  • Estate agents

New for the third directive are:

  • Trusts and company service providers

  • dealers selling goods for cash (>€15,000)

  • life insurance intermediaries

Next Topic: Regional FATF-Style Bodies and FATF Associate Members

Previous Topic: Second Directive

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