1. AML/CFT Compliance in the eu
Prof. Dr. Eduard Ivanov

2. Main legal acts EU directives on payment services:
Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market;
Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions
 Directive 2013/36/EU Directive 2013/36/EU
Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market

3. Main legal acts
EU directives and regulations on combating money laundering and terrorist financing
Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing
Regulation (EU) 2015/847 of the European Parliament and of the Council of 20 May 2015 on information accompanying transfers of funds
National AML/CFT law

4. subjects of the obligations under AML/CFT LAW
Financial institutions (Point 2 of the Article 3 of the Directive (EU) 2015/849)
List of financial institutions – Directive 2013/36/EU, Annex 1
Point 4 of the Annex 1 - Payment services as defined in Article 4(3) of Directive 2007/64/EC

5. challenges for payment services providers
Opening an account or providing services without presence of customer at the same place (various thresholds in national AML/CFT law)
Level of identification and due diligence
Prevention of legal and reputational risks

6. Opening an account or providing services
Directive (EU) 2015/849. Threshold for simplified identification and due diligence – Euro
Czech Republic – 250 euros, or 500 euros in case of electronic money usable only for domestic payment transactions, or in case of a rechargeable medium, should there be an annual limit of 2,500 euros, with the exception of cases when the holder of electronic money converts back more than 1,000 euros in a calendar year (Selected measures against legitimization of proceeds of crime and financing of terrorism (AML/CFT Act), Act 235/2008 Coll. of 2008)
Estonia - An electronic money institution may take simplified due diligence measures if an electronic money device does not allow for reloading and the amount saved in one electronic money device does not exceed 250 euros
Estonia – identification on the basis of a document issued by the Republic of Estonia for digital identification in particular cases (Money Laundering and Terrorist Financing Prevention Act of 2007)

7. Due diligence Normal (standard) due diligence
Simplified identification and due diligence
Enhanced due diligence

8. Minimal standard of due diligence
Passport or other document in accordance with national law
Address of the place of residence
Identification of PEPs
Lists of terrorists
Sanction lists
Red flags!!!

9. Identification of beneficial owners
Definitions of beneficial owners in national laws
Various approaches to identification

10. Risk assessment
26 June 2017 – Report of the European Commission on the main risks of ML/TF at the EU level
Geographical risks. Basel Institute AML Index (
Corruption
Financing of terrorism

11. corruption
Transparency International Index
Transnational application of foreign anti-corruption law (FCPA, UK Bribery Act, new law in France, other jurisdictions)
Various definitions of public officials in AML/CFT and in anti-corruption law
Use of available sources of information (declarations of incomes and assets, registers of companies)

12. Financing of terrorism
US Department of State reports (States – sponsors of terrorism)
Global Terrorism Index terrorism-index/
Terrorism and Political Violence Risk Map

13. Vulnerabilities of payment services
Misuse of multiple transactions between physical persons for terrorist financing, drug business, smuggling
Misuse of charitable donations for the financing of terrorism
Use of front persons in ML/TF schemes

14. Thank you for your attention!
Prof. Dr. Eduard Ivanov