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What is AMLD5?

AMLD5 - The European Union’s 5th Anti-Money Laundering Directive; amendment of the Anti-Money Laundering (AML), published in 2018.
2 minutes

Let's find out AMLD5 meaning, definition in crypto, what is AMLD5, and all other detailed facts.

The European Union’s 5th Anti-Money Laundering Directive (AMDL5) is the fifth amendment to the Anti-Money Laundering (AML) framework. It was published on June 19, 2018. The key requirement was for all EU member states to implement the AMDL5 into national laws by January 10, 2020.

The AMLD5 introduced requirements for cryptocurrencies, Ultimate Beneficial Owner (UBO) registers, and prepaid card transaction limits. The aim is to improve Anti-Money Laundering and Combating the Financing of Terrorism (CFT) policies in the European Union. The directive closes the loopholes that have been exploited by financial criminals.

The directive aligns with the FATF Standards updated in June 2019. These new additions include guidance for virtual assets as well as virtual asset service providers.

The definition of obligated entities was updated to include custodian wallet service providers, customer due diligence for funds from high-risk third countries, fiat-to-crypto organizations, Politically Exposed Persons (PEP) screening, and UBO registration.

The AMLD5 is a European Union directive – a legal framework that aims to achieve a set goal in all member states by implementing changes in the local laws of each state. These directives do not have legally binding power. However, failure to adhere to these regulations may impose fines on the member states.

Some member states did not meet the criteria set out by the AMLD5 by its deadline in January 2020. This is due to the varying regulatory laws in each member state which can be complicated to alter or update according to the AMLD5.