European Union Anti Money Laundering Package

The EU AML Package comprises:

• The AML Regulation (AMLR): Introduces a single, directly applicable EU-wide AML rulebook, including harmonised customer due diligence requirements.
• The 6^th AML Directive (AMLD6): Covers supervisory cooperation, Financial Intelligence Units (FUIs) and enforcement and sanctioning mechanisms.
• The AML Authority Regulation (AMLA): Establishes a new EU-level authority that will directly supervise selected institutions, issue guidance and coordinate national supervisors.
• Revised Funds Transfer Regulation: Strengthens transparency and traceability of fund transfers.

Under the new EU AML Package, and in particular the EU AML Regulation, several key changes have been introduced that affect customer due diligence requirements:

Beneficial Ownership:

• In complex ownership structures, ownership is calculated by tracing and multiplying interests across all layers. A beneficial owner is usually a natural person who owns or controls 50% plus one share, holds the majority of voting rights, or otherwise exercises control. Ownership and control can overlap, and lower thresholds may apply in higher‑risk cases.
• The new framework requires additional beneficial owner details, including residential address and personal identification number, even for entities listed on a regulated market. If no beneficial owner is identified, senior managing officials must be identified and verified instead.

Expanded definition of politically exposed persons (PEPs):

• The scope of PEPs has been broadened to include, among others, heads of regional and local authorities.

Obligation for non-EU customers to report their Beneficial Ownership to the Central Registrar:

• The new framework requires foreign legal entities or legal arrangements to report their beneficial ownership details to the central register and submit a certificate of proof of registration, or an excerpt of the beneficial ownership information held by the register to obliged entities to proceed with the onboarding.

To meet regulatory requirements, UBS relies on clients to ensure that information held on record is accurate, complete and kept up to date. This may include providing:

• Corporate and registration information
• Details of authorised representatives
• Identification documentation where applicable
• Information on ownership, control and the purpose of the relationship

UBS is also required to review and refresh client information at defined intervals and when regulatory triggers arise.

No immediate action is required unless UBS contacts you directly. However, you may find it helpful to prepare in advance by making sure key information about your entity is accurate and easy to access. In particular, you may wish to review the following:

Your corporate structure

• Check that your legal structure, registration details, and information on legal representatives are up to date and supported by the relevant documents.

Beneficial ownership

• If your entity is already registered in an EU beneficial ownership register, please confirm that the details of the individuals who ultimately own or control the entity are correct, complete, and up to date. Please note that EU definitions and thresholds for beneficial ownership will change from July 2027.

Foreign entities and arrangements

• If your entity is not currently registered in an EU beneficial ownership register, consider whether you may need to register under the new AML framework and ensure that the required information is available.
• Pursuant to Article 67 of the AMLR (Regulation (EU) 2024/1624), legal entities established outside the EU and trustees of express trusts administered outside the EU are, inter alia, required to submit beneficial ownership information to the central register of the EU Member State in which they:
  • enter into a business relationship with a financial institution;
  •  acquire real estate; or
  • are awarded a public contract for goods or services, or a concession, by an EU contracting authority
• For example, a US-based entity initiating a business relationship with UBS ESE Germany is required to register with the German Transparency Register and provide either a certificate of its registration with the Register or an extract of the beneficial ownership information recorded therein to UBS before onboarding.
• In order to meet one of the KYC requirements, UBS has therefore to obtain either a certificate evidencing registration or an extract of the beneficial ownership information recorded in the relevant central register. Please ensure that you make yourself familiar with the requirements set out in Article 63 and Articles 51 to 57 of the AMLR.

The EU AML regulatory regime was implemented in phases over several years, allowing institutions and clients time to prepare for the new framework.

The key milestones are as follows:

2024: Adoption of the EU AML Package

• The EU institutions formally adopted the Anti-Money Laundering Regulation (AMLR), the related AML Directive and the regulation establishing the Anti-Money Laundering Authority (AMLA). This marked the legal foundation of the new regime.

2025 - 2027: Development of technical standards and regulatory guidance

• During this period, EU regulators will issue detailed technical standards and guidance clarifying how the new rules are to be applied in practice. These releases are intended to support consistent implementation across Member States and may refine certain requirements.

2025 - 2026: Establishment and operational ramp-up of AMLA

• AMLA will be set up and progressively become operational, initially focusing on coordination, convergence and preparatory supervisory work, ahead of assuming its full mandate.

July 2027: Effective date of the AML Regulation (AMLR)

• The AMLR is expected to apply from July 2027. From this point, the new, directly applicable AML rules will take effect across the EU.

By 2027: Transposition of remaining AML Directive provisions

• Member States will be required to transpose the remaining elements of the AML framework into national law by this time.