Source: OJ L, 2024/1624, 19.6.2024Current language: EN
- Anti-money laundering
Basic legislative acts
- Anti-money laundering regulation (AMLR)
Article 34 Scope of application of enhanced due diligence measures
Summary What does Article 34 of the Anti-money laundering regulation (AMLR) say?
This is the central article on enhanced due diligence (EDD), setting out when and how obliged entities must go beyond standard customer due diligence measures.
It builds directly on Article 20, which establishes the standard due diligence framework, and is triggered wherever higher risk is identified — whether through the specific scenarios mandated in other articles (such as those covering high-risk third countries or politically exposed persons) or through an obliged entity's own risk assessment.
The article provides a menu of EDD measures that may be applied, covers the mandatory scrutiny of unusual or complex transactions, and introduces a separate, stricter layer of obligations for entities serving very high-net-worth clients.
It also addresses the role of Member States and the Commission in identifying and responding to higher-risk scenarios at a national and Union-wide level.
Important points:
- Apply enhanced due diligence measures whenever higher risk is identified, drawing on factors including Annex III, AMLA guidelines, FIU notifications, and your own business-wide risk assessment.
- For high-value private wealth relationships — where assets handled exceed EUR 5 000 000 and the customer holds total assets of at least EUR 50 000 000 — credit institutions, financial institutions, and trust or company service providers must apply additional mandatory EDD measures on top of the standard EDD toolkit, including conflict of interest management between the customer and staff.
- Member States are required to notify the Commission and AMLA within 1 month of imposing any additional EDD requirements on obliged entities in their territory, with a justification of the risks underpinning the decision.
Springlex's summary of the article, a reading aid, not a substitute for the legal text.
In the cases referred to in Articles 29, 30, 31 and 36 to 46, as well as in other cases of higher risk that are identified by obliged entities pursuant to Article 20(2), second subparagraph, obliged entities shall apply enhanced due diligence measures to manage and mitigate such risks appropriately.
Obliged entities shall examine the origin and destination of funds involved in, and the purpose of, all transactions that fulfil at least one of the following conditions:
the transaction is of a complex nature;
the transaction is unusually large;
the transaction is conducted in an unusual pattern;
the transaction does not have an apparent economic or lawful purpose.
With the exception of the cases covered by Section 2 of this Chapter, when assessing the risks of money laundering and terrorist financing posed by a business relationship or occasional transaction, obliged entities shall take into account at least the factors of potential higher risk set out in Annex III and the guidelines adopted by AMLA pursuant to Article 32, as well as any other indicators of higher risk such as notifications issued by the FIU and findings of the business-wide risk assessment under Article 10.
With the exception of the cases covered by Section 2 of this Chapter, in cases of higher risk as referred to in paragraph 1 of this Article, obliged entities shall apply enhanced due diligence measures, proportionate to the higher risks identified, which may include the following measures:
obtaining additional information on the customer and the beneficial owners;
obtaining additional information on the intended nature of the business relationship;
obtaining additional information on the source of funds, and source of wealth of the customer and of the beneficial owners;
obtaining information on the reasons for the intended or performed transactions and their consistency with the business relationship;
obtaining the approval of senior management for establishing or continuing the business relationship;
conducting enhanced monitoring of the business relationship by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination;
requiring the first payment to be carried out through an account in the customer’s name with a credit institution subject to customer due diligence standards that are not less robust than those laid down in this Regulation.
Where a business relationship that is identified as having a higher risk involves the handling of assets with a value of at least EUR 5 000 000, or the equivalent in national or foreign currency, through personalised services for a customer holding total assets with a value of at least EUR 50 000 000, or the equivalent in national or foreign currency, whether in financial, investable or real estate assets, or a combination thereof, excluding that customer’s private residence, credit institutions, financial institutions and trust or company service providers shall apply the following enhanced due diligence measures, in addition to any enhanced due diligence measure applied pursuant to paragraph 4:
specific measures including procedures to mitigate risks associated with personalised services and products offered to that customer;
obtaining additional information on that customer’s source of funds;
preventing and managing conflicts of interest between the customer and senior management or employees of the obliged entity that undertake tasks related to that obliged entity’s compliance in relation to that customer.
By 10 July 2027, AMLA shall issue guidelines on the measures to be taken by credit institutions, financial institutions and trust or company service providers to establish whether a customer holds total assets with a value of at least EUR 50 000 000, or the equivalent in national or foreign currency, in financial, investable or real estate assets and how to determine that value.
With the exception of the cases covered by Section 2 of this Chapter, where Member States identify cases of higher risks pursuant to Article 8 of Directive (EU) 2024/1640, including as a result of sectoral risk assessments carried out by the Member States, they may require obliged entities to apply enhanced due diligence measures and, where appropriate, specify those measures. Member States shall notify to the Commission and AMLA their decisions imposing enhanced due diligence requirements upon obliged entities established in their territory within 1 month of their adoption, accompanied by a justification of the money laundering and terrorist financing risks underpinning such decision.
Where the risks identified by Member States pursuant to the first subparagraph are likely to stem from outside the Union and may affect the Union’s financial system, AMLA shall, upon a request from the Commission or on its own initiative, consider updating the guidelines adopted pursuant to Article 32.
The Commission is empowered to adopt delegated acts in accordance with Article 85 to supplement this Regulation where it identifies additional cases of higher risk as referred to in paragraph 1 of this Article that affect the Union as a whole and enhanced due diligence measures that obliged entities are to apply in those cases, taking into account the notifications by Member States pursuant to paragraph 6, first subparagraph, of this Article.
Enhanced due diligence measures shall not be invoked automatically with respect to branches or subsidiaries of obliged entities established in the Union which are located in third countries referred to in Articles 29, 30 and 31 where those branches or subsidiaries fully comply with the group-wide policies, procedures and controls in accordance with Article 17.
Springlex and this text is meant purely as a documentation tool and has no legal effect. No liability is assumed for its content. The authentic version of this act is the one published in the Official Journal of the European Union.
Definition
crypto-asset services
Definition
senior management
Definition
financial mixed activity holding company
Definition
crypto-asset service provider
Definition
credit institution
- a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013;
- a branch of a credit institution, as defined in Article 4(1), point (17), of Regulation (EU) No 575/2013, when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
crypto-asset
Definition
property
Definition
express trust
Definition
legal arrangement
Definition
management body
Definition
terrorist financing
Definition
trust or company service provider
- the formation of companies or other legal persons;
- acting as, or arranging for another person to act as, a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
- providing a registered office, business address, correspondence address or administrative address, as well as other related services for a company, a partnership or any other legal person or legal arrangement;
- acting as, or arranging for another person to act as, a trustee of an express trust or performing an equivalent function for a similar legal arrangement;
- acting as, or arranging for another person to act as, a nominee shareholder for another person;
Definition
money laundering
Definition
financial institution
- an undertaking other than a credit institution or an investment firm, which carries out one or more of the activities listed in points (2) to (12), (14) and (15) of Annex I to Directive 2013/36/EU of the European Parliament and of the Council(32), including the activities of currency exchange offices (bureaux de change), but excluding the activities referred to in point (8) of Annex I to Directive (EU) 2015/2366, or an undertaking the principal activity of which is to acquire holdings, including a financial holding company, a mixed financial holding company and a financial mixed activity holding company;
- an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council(33), insofar as it carries out life or other investment-related assurance activities covered by that Directive, including insurance holding companies and mixed-activity insurance holding companies as defined, respectively, in Article 212(1), points (f) and (g), of Directive 2009/138/EC;
- an insurance intermediary as defined in Article 2(1), point (3), of Directive (EU) 2016/97 where it acts with respect to life insurance and other investment-related insurance services, with the exception of an insurance intermediary that does not collect premiums or amounts intended for the customer and which acts under the responsibility of one or more insurance undertakings or intermediaries for the products which concern them respectively;
- an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU of the European Parliament and of the Council(34);
- a collective investment undertaking, in particular:
- an undertaking for collective investment in transferable securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC and its management company as defined in Article 2(1), point (b), of that Directive or an investment company authorised in accordance with that Directive and which has not designated a management company, that makes available for purchase units of UCITS in the Union;
- an alternative investment fund as defined in Article 4(1), point (a), of Directive 2011/61/EU and its alternative investment fund manager as defined in Article 4(1), point (b), of that Directive that fall within the scope set out in Article 2 of that Directive;
- a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council(35);
- a creditor as defined in Article 4, point (2), of Directive 2014/17/EU of the European Parliament and of the Council(36) and in Article 3, point (b), of Directive 2008/48/EC of the European Parliament and of the Council(37);
- a credit intermediary as defined in Article 4, point (5), of Directive 2014/17/EU and in Article 3, point (f), of Directive 2008/48/EC, when holding the funds as defined in Article 4, point (25), of Directive (EU) 2015/2366 in connection with the credit agreement, with the exception of the credit intermediary carrying out activities under the responsibility of one or more creditors or credit intermediaries;
- a crypto-asset service provider;
- a branch of a financial institution referred to in points (a) to (i), when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
third country
Definition
funds
Definition
beneficial owner
Definition
business relationship
Definition
management body in its management function