With the EU Regulation 2024/1624, adopted by the European Parliament and the European Council on the 31st of May last year, a significant change to the anti-money laundering and terrorist financing framework of the European Union was introduced. The list of entities that will be the subject of this regulation is very encompassing, and it includes, but is not limited to, credit institutions, financial institutions, as well as natural or legal persons offering auditing, accounting, and tax advising services, legal professionals such as lawyers and notaries, trusts, or other company service providers.
The most significant changes are introduced in the area of customer due diligence: Namely, the obliged entities are now required to conduct customer due diligence:
- When establishing a business relationship;
- During occasional transactions with a value of at least 10 000€;
- When partaking in the creation of a legal entity;
- When a suspicion of money laundering or terrorist financing exists;
- In other taxatively stated cases, with particular limitations regarding crypto-asset service providers.
It should be particularly noted that the obliged entities are required to conduct customer due diligence in the case of a cash payment in the amount of at least 3 000€.
The due diligence itself is to be carried out through an insight in the customers’ identification documents to identify the customer and verify its identity, as well as through obtaining the information on the purpose of the business relationship or the occasional transaction, and if necessary, obtaining information on the customer’s business or its employment. Other measures are also defined in this regulation.
Finally, the documentation, as well as the information acquired through the customer due diligence, is to be kept for a period of 5 years (if a competent authority does not require a longer period), commencing on the date of the termination of the business relationship or on the date of the carrying out of the occasional transaction, after which they are to be deleted.
The regulation will be applied from the 10th of July 2027.
Prepared by,
Daniel Vujacic, LL.M. (UW)