What is AMLD?

What is AMLD?

Judy Rubio

Those, wishing to register a cryptocurrency business in a number of European countries, should take into consideration that the EU Directive may effect credit organizations having business affairs and dealing with the high-risk countries or those having representation in there.

What consequences may AMLD have?

The list of high-risk third-countries is constantly changing. The Council of the European Union has recently decided not to include Panama, Saudi Arabia and the Virgin Islands in it. The article "Cryptocurrency regulation in Europe" is dedicated to European Union current laws.

The introduction of AMLD will especially affect Austria. For example, it will affect the beneficial owners Act and The anti-money laundering Act in financial markets.

The following areas will be affected by the changes: 

  • Limitation of high-risk transactions involving third-countries and business relations with them
  • Regulation of companies providing cryptographic services
  • Open access to the beneficiaries list

Cryptographic service providers work under new rules

Those wishing to register a company in Austria to provide cryptographic service and open bank account should keep track on the latest changes in the legislation. So, starting from August 2019 FM-AMLA operates in relation to the organizations that provide the following services:

  • Digital currencies exchange and transfer
  • Individual crypto-keys protection for the purpose of cryptocurrency storage, placement and transfer
  • Digital currencies issue and sale

What does this mean as a practical matter? For example, someone may decide to register a company in Austria in order to conduct business in the field of cryptocurrencies and open a Bank account in the same country. The Bank will have to conduct due diligence to receive payments from Bosnia and Herzegovina. In addition, the measures for verifying reliability in Austria would be strengthened. They include the following:

  • Providing client and beneficiary’s additional information regarding welfare and sources of income
  • Approval of the management team in order to continue the business relationship.
  • Improved monitoring of business relationships due to the controlling methods and operation patterns’ amount and lifetime increase. They still require further study.

The introduction of AMLD in Austria led to the country's Finance Minister being given such authorities:

  • Prohibit country’s credit institutions from opening their representative offices and branches in high-risk countries
  • Establish requirements for banks to revise, terminate and change correspondent relations with respondent organizations in high-risk third-countries

AMLD rules will continue to improve and compliance requirements will significantly more stringent. In case you are planning to register a company in one of the European countries and get the appropriate license to operate, you should study the current legislation in detail and keep track on the updates. Governments are now guiding the efforts to combat money laundering and, as a result, meet the new requirements.