The fourth and fifth EU anti-money laundering directives and the difficulties legal professionals, especially notaries, encounter due to the adoption of the risk based approach

Abstract

The European Union has, over the years, taken significant measures which are aimed at combatting Anti-Money Laundering (“AML”), by involving initiatives taken up by international organisations, namely the Financial Action Task Force (“FATF”) and the European Union (“EU”), through the Fourth and the Fifth Directives, which push forward greatly a risk-based approach. The Financial Intelligence Agency Unit (“FIAU”), being the government agency in charge of combatting money laundering and funding of terrorism, have recently supplemented the Prevention of Money Laundering Act (“PMLA”) and the Prevention of Money Laundering and Terrorist Fund Regulations (“PMLTFR”), with Implementing Procedures which are binding on subject persons and is used to guide and assist them in understanding and fulfilling their obligations as set out under the regulations, thus, guaranteeing an effective implementation therefrom. Nonetheless, several notaries do believe that these Implementing Procedures could be adapted in a way that would accommodate the services done by a notary which are most vulnerable to misuse by criminals who intend to launder money. The broad aim of this dissertation is to examine the 4th and 5th EU AML Directives, certain aspects they involve, and if the FIAU has, through the implementing procedures and other publications, adequately adapted to the relationship between the Legal Professionals and AML activities that they may be vulnerable to. This study will identify the issues notaries are faced with in relation to the inadequacy of their obligation, which has been done through the use of semi-structured interviews. Furthermore, this dissertation will propose certain changes which will aid to reduce these conflicts. Through this, a way forward is offered for notaries to have a clearer guide regarding their obligations related to AML, which may be specifically focused on their services, in combination with their role as subject persons.