On 28 February 2017, the House of Commons European Scrutiny Committee published its 32nd report of the 2016-17 parliamentary session.
Among other things, in the report, the committee considers the proposed Fifth Money Laundering Directive (MLD5), which amends the Fourth Money Laundering Directive ((EU) 2015/849) (MLD4) (see section 4, which starts on page 20).
The committee explains that it has considered MLD5 three times previously and has heard that, although the government welcomes MLD5 it had concerns on issues relating to:
- Shareholding thresholds for company registrations.
- Registration of beneficial owners of all trusts and trust-like legal arrangements.
- Registers of bank and payment accounts.
However, the government now advises the committee that the Council of the EU has agreed on a text for negotiation in trialogue with the European Parliament
The Council’s text not only addresses the three issues the government had previously drawn to the committee’s attention but also proposes a less onerous due diligence process for domestic politically exposed persons (PEPs).
The committee is grateful to the government for its “encouraging account” of where matters stand on MLD5. However, the MLD5 legislative proposal remains under scrutiny pending accounts from the government on the development of the MLD5 trialogue discussions.
When the government next reports, the committee wants to know the implications, in the context of Brexit, of the 36 month implementation period for the proposed registers of bank and payment account provisions. It also wants to know whether the government proposes that there should be UK legislation, post-Brexit, to counter the financing of terrorism, money laundering and tax evasion, similar to the EU legislation.
When the Committee last considered MLD5, in November 2016, the government advised that it had decided to (purport to) opt in to MLD5
The European Commission published its MLD5 legislative proposal in July 2016.
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