EU tightens fight against suspicious funds

Certain recipients of cash payments of over €15,000 (about Lm6,500) will have to assist the authorities in their fight against organised crime and terrorism.

A new EU directive, approved by the EU Council, will be applicable not only to the financial sector, such as banks and foreign exchange agencies, but also to lawyers, notaries, accountants, real estate agents, casinos and company service providers.

Any of the above-mentioned individuals or entities receiving cash payments exceeding €15,000 will have to verify the identity of their customers and monitor their business relationship with the customers.

They will also be obliged to report suspicious transactions, that could include money laundering or terrorist financing, to the public authorities and to national financial intelligence agencies. They will also have to take support measures, including proper training of their personnel and the establishment of appropriate internal preventive policies and procedures.

The new rules will come into force across the EU in the beginning of 2008, two years after the publication of the directive in the EU journal.

Malta's Money Laundering Act, enacted in 1994, already includes a similar provision and is even more strict than the EU directive in that it sets the limit for reporting cash receipts at Lm5,000. An amendment will therefore have to be made.

The Third Anti-Money Laundering Directive, as the new rule is known, builds on existing EU legislation.

Internal Market and Services Commissioner Charlie McCreevy said he was satisfied that cooperation between the European Parliament, the Council and the Commission has enabled the swift adoption of this crucial directive.

Apart from boosting the fight against terrorist financing and organised crime, the directive is meant to prevent damage to the stability and reputation of the financial sector and the single market. It introduces additional requirements and safeguards for high-risk situations such as trading with correspondent banks outside the EU.