The effect of the fourth anti-money laundering directive on smaller institutions

Abstract

The following study seeks to investigate the effect of the new Fourth Anti-­Money Laundering Directive introduced by the EU in smaller institutions. This dissertation also aims to determine the differences in requirements of the new risk-­based approach versus the one under the previous Directive. The new Anti-­Money Laundering Directive which was enacted in June 2015, outlines a number modification to the Third EU Anti-­Money Laundering Directive. New requirements have been put in place, whereby Member States are now required to evidence that they have taken the necessary steps to identify, assess, understand and reduce AML risks. This study will, therefore, determine which institutions locally are affected by this regulation and the way it is affecting them. Specifically, the impact it has on smaller institutions/providers. The new Directive also requires enhanced due diligence measures for situations that present a higher money laundering risk. Consequently, this study seeks to determine the impact on their due diligence procedures. Finally, this study will determine whether the new approach will benefit these smaller institutions or not.