On July 2, 2020, the European Commission referred three member states, Austria, Belgium and the Netherlands, to the European Court of Justice, for failing to implement fully the 4th Anti-Money Laundering Directive. The EC has requested that the court impose financial sanctions for these deficiencies.
The Directive, enacted in June 2015, requires that all EU member states enact compliant legislation by June 26, 2017. It expands the definition of politically exposed persons, emphasizes the identification of ultimate beneficial ownership and enhanced due diligence, and provides lower cash payment thresholds than the 3rd Anti-Money Laundering Directive, which it replaced. Additionally, the 4th Directive covers all gambling organizations, not only casinos.
In its review of implementation of the 4th Directive by member states, the Commission found that Austria had not enacted betting and gambling legislation consistent with the requirements of the Directive. The Commission also found that Belgium’s laws did not include sufficient mechanisms for the exchange of documents by the various financial intelligence units, and that in the Netherlands, the legal groundwork for the provision of beneficial ownership information for corporate and other legal entities was inadequate.
Austria, Belgium and the Netherlands are not the first targets of 4th Directive enforcement. After the June 2017 deadline for implementation of the Directive, the Commission initiated infringement proceedings against all EU member states, having found that none had notified the Commission of complete transposition of the Directive. The Commission later sent Reasoned Opinions to three member states, and initiated proceedings against two others. The Commission’s July 2 action brings to five the number of states currently before the ECJ for 4th Directive failings.