NEWS FLASH: Agreement reached – EU outlines its position on beneficial ownership, virtual currencies
20 Dec 2017

The European Council on Wednesday announced that the European Union’s main bodies have reached an agreement on the hotly-debated issue of who should be allowed to access information about the true or beneficial ownership of companies.

It also said it would impose due diligence controls on virtual currency exchange platforms.

The bloc wants to incorporate the measures as part of its drive to tackle corporate secrecy surrounding firms and trusts, as well as money laundering and terrorism funding.

The subject of beneficial ownership has caused a rift among member states and parliamentarians, with some advocating for public access to beneficial ownership registers while others demanded restricted access to law enforcement and parties with a ‘legitimate’ interest.

According to a European Council statement, on Wednesday EU ambassadors confirmed the political agreement reached between the presidency and the European Parliament on the matter.

has been now agreed that there will be public access to beneficial ownership information on companies. However, regarding trusts and similar legal arrangements, there will be access on the basis of ‘legitimate interest’ to beneficial ownership information.

They also agreed to have public access upon written request [for] beneficial ownership information on trusts that own a company that is not incorporated in the EU.

The beneficial ownership registers will also be interconnected to facilitate cooperation between member states, and member states will retain the right to provide broader access to information, in accordance with their national law.

There was also consensus on virtual currencies.

“Virtual currency exchange platforms and custodian wallet providers will have to apply customer due diligence controls, ending the anonymity associated with such exchanges,” the statement said.

Regarding prepaid cards, the threshold for identifying the holders of prepaid cards is lowered from €250 to €150, and customer verification requirements are extended.

Toomas Tõniste, minister for finance of Estonia, which currently holds the Council presidency, said: “Today’s agreement is an important step in removing the means available to terrorists.”

“It contains new measures that will help the authorities to better track financial flows and disrupt the financing of criminal networks.”

The agreement is an amendment to a directive aimed at combating money laundering and terrorism financing within the EU.

Following Wednesday’s announcement, the European Parliament and Council will now be called on to adopt the proposed directive at [its] first reading.

Related topics:

EU Fifth Anti-Money Laundering Directive: Can banks handle it?

Ending money laundering in Europe’ – a critical summary of Transparency International’s latest report

New EU beneficial ownership rules for trusts: Good news for offshore?

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