The fifth Anti Money Laundering Directive (AMLD5) came into effect on 10 January 2020, setting out a new set of rules to help financial entities protect against money laundering risks and financing of terrorism.
The legal framework against financial crime was completed alongside the Regulation on the Information accompanying the Transfer of Funds.
Why do we need AML5?
Money laundering is a big problem.
The estimated amount of money laundered globally in one year is 2 - 5% of global GDP, an equivalent of up to
This issue has to be addressed because it undermines the economy and jeopardises financial institutions.
The new Directive adds to the legislation enshrined in AMLD1 (1991), AMLD2 (2001), AMLD3 (2006) and AMLD4 (2015).
Penalties for AML and KYC violations increases
Financial Institutions that do not properly address the regulation get an average fine of
The EU authorities recognise financial crime is a serious issue, and they have updated the regulatory framework to tackle it:
TOPIC: ANTI-MONEY LAUNDERING
ACTION: ANTI MONEY LAUNDERING - DIRECTIVES I-V
- Improve understanding of customers and their financial dealings to minimise risk
- Stricter customer due diligence Control customer identity and share data with central administration
- Enforcing Politically Exposed Persons (PEP) lists (new)
- Electronic identification must comply with eIDAS (new)
- Regulating cryptocurrencies and pre-paid cards (new)
Who's affected by AML5?
The challenges in implementing AML5
Reinforced Know Your Customer (KYC) and Customer Due Diligence (CDD) requirements for entities such as banks need to be implemented in the first stage of any business relationship when enrolling a new customer. This means employees at the front desk.
How Thales can help
We are a world leader in managing and securing identities and have already developed solutions to help financial institutions to meet regulatory compliance requirements.
Built on our strong expertise in ID verification, we support financial institutions with a solution that helps them comply with new regulations, particularly those regarding CDD (Customer Due Diligence) and KYC (Know Your Customer) obligations.
Ease of implementation.
The solution is available as consistent Software-as-a-Service, with no complex IT integration
A fully secure solution. We have been ranked #1 in the secure ID document market
used in the most demanding
environments, such as border control, with support for biometric technologies
User-friendly technology for both internal users and customers, designed specifically
for your environment
Everything you need to know about AML 5
The fifth Anti Money Laundering Directive (AMLD5) set a new set of rules to help financial entities protect against the risks of money laundering and financing of terrorismDownload the infographic