On 5 February 2013, the European Commission published draft versions of two legislative proposals regarding money laundering and funds transfers: (1) a directive on the prevention of the use of the financial system for money laundering and terrorist financing (commonly referred to as “MLD4”), and (2) a regulation on the information to accompany transfers of funds. The proposals set out in MLD4 are aimed at meeting the recent proposals from the Financial Action Task Force (“FATF”) and a parallel review by the Commission into MLD3.

In terms of what will remain the same, much of existing customer due diligence applicable under English law will remain unchanged, as will the money laundering offences.

Amongst the more notable proposed changes are:

• the requirement for enhanced due diligence conducted in respect of PEPs to include beneficial owners (Chapter II, Section 3); and t
• he requirement for every company, legal entity and trust within the EU to hold adequate, accurate and current information about their beneficial owners (Chapter III).

The new laws are expected to come into force in the UK, following further consultation and adoption, in late 2014.