1st AMLD 1991: Credit and Financial Institutions, Drugs-Related Offences
The European Union adopted the 1st anti-money laundering Directive in 1990 in order to prevent the misuse of the financial system for the purpose of money laundering. It provided the initial framework and established key preventative measures such as customer/client identification, record-keeping and central methods of reporting suspicious transactions. It was passed to ensure a universal approach was adopted by Member States to combat the problem of money laundering, protecting the EU Single Market.
- Due diligence checks must be carried out by all credit and financial institutions before entering into any business relationship or before conducting any transaction over a certain threshold;
- All collated identification documents, evidence and existing records collected as part of the due diligence checks must be kept for at least five years by credit and financial institutions;
- There must be close international co-operation and harmonization between credit and financial institutions and their supervisory authorities and the establishment of a mandatory central system of reporting;
- The confidentiality rules regarding customer information should be toned down in relation to disclosing suspected money laundering offences to the authorities; and
- Special protection should be afforded to credit and financial institutions, their employees and their directors who have to breach confidentiality rules in order to make the disclosure.
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