When considering anti-money laundering (AML) procedures, it is tempting to assume a uniform approach, especially when considering operations within countries across a shared jurisdiction like the European Union (EU).
After all, countries under the same legislative umbrella should, in theory, adopt identical AML standards. However, a closer examination reveals a much more nuanced landscape. Despite the EU's overarching AML directives, the interpretation and implementation of these laws vary from one member state to another.
At a foundational level, the AML requirements seem identical:
- Conduct a risk assessment
- Collect corporate information (via corporate registry) for any entities such as their registered name, registered address and registration number
- Identify any individuals with 25%+ beneficial ownership or control
- Collect and verify an individual’s name, date of birth and address
- Run a PEP and sanction check
These basics form the foundation of AML compliance. But for business with multi-jurisdictional AML obligations, particularly those navigating cross-border operations within Europe, this simplistic view doesn’t cut it.
Each EU member state, while adhering to the same broad directives, has unique requirements and interpretations of AML legislation. This flexibility in how these directives are enacted and enforced locally means that a compliance process effective in one country might fall short in another.
Staying on top of these specific AML requirements is essential. By doing so, businesses can protect themselves against the significant risks of non-compliance, ensuring their operations remain legal and resilient against the threat of money laundering.
Comparative guide to EU’s AML requirements
Here is a simple table highlighting the additional requirements between countries a compliance officer should note when implementing compliance processes across the EU.
CDD requirements
Other AML requirements
The bottom line
Companies with multinational AML obligations should keep in mind the differences when implementing and adapting compliance strategies across Europe to ensure they meet both EU and local regulations. These above table provides a birds eye view of the key differences for AML requirements from country to country within the EU.
Despite these differences, the importance of understanding and adhering to them remains the same. For multinational companies, this understanding is crucial to ensuring compliance and maintaining a positive reputation.
About First AML
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Making an otherwise complex and manual onboarding process simple for clients and cost effective and compliant for businesses, First AML delivers efficiency and time savings, protecting reputations, and enabling companies to be on the right side of history in the face of global threats.
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