The Third European Union Money Laundering Directive (3MLD) is a legal framework that aims to prevent the use of the financial system for the purposes of money laundering and terrorist financing. It was adopted in
2005 and repealed by the Fourth European Union Money Laundering Directive (4MLD) in 2015. The 3MLD applies to a range of entities that are considered to be exposed to the risk of money laundering and terrorist financing, such as:
* Financial institutions, which include credit institutions, financial intermediaries, insurance companies, investment firms, and payment service providers.
* Casinos, which include both online and offline gambling services that involve wagering a stake with monetary value.
* Real estate agents, which include both natural and legal persons that act as intermediaries in the buying and selling of real property or rights over it.
The 3MLD requires these entities to implement a number of measures to prevent and detect money laundering and terrorist financing, such as:
* Conducting customer due diligence, which involves identifying and verifying the customer and the beneficial owner, understanding the purpose and nature of the business relationship, and applying enhanced or simplified measures depending on the level of risk.
* Keeping records of customer and transaction data for at least five years after the end of the business relationship or the execution of the transaction.
* Reporting suspicious transactions or activities to the competent authorities without delay and without tipping off the customer.
* Establishing internal policies, procedures, and controls to ensure compliance with the 3MLD, and providing adequate training and awareness to staff.
* Cooperating with the relevant supervisory and regulatory authorities and financial intelligence units.
The 3MLD does not apply to defense attorneys, as they are not considered to be obliged entities under the directive. However, the 3MLD does apply to other legal professionals, such as notaries, lawyers, and accountants, when they perform certain activities on behalf of their clients, such as:
* Buying and selling of real property or business entities
* Managing of client money, securities, or other assets
* Opening or managing bank, savings, or securities accounts
* Organizing contributions for the creation, operation, or management of companies
* Creating, operating, or managing trusts, companies, foundations, or similar structures References:
* THE THIRD EU DIRECTIVE ON MONEY LAUNDERING AND TERRORIST FINANCING, page
11-12
* Anti-money laundering and countering the financing of terrorism legislative package, page 1
* CAMS Study Guide - 6th Edition, Chapter 1, Section 1.2, page 11
V

Explanation
The red flags that should be considered prior to establishing a relationship with a third party are the lack of anti-corruption compliance clauses in agreements (A) and unusual payment or billing procedures requested by the third party (C). According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, "red flags include, but are not limited to: [...] lack of anti-corruption compliance clauses in agreements (page 330) and unusual payment or billing procedures requested by the third party (page 331)."

Explanation
"The decision of whether or not to file a suspicious transaction report (also known as a suspicious activity report or SAR in the United States) often involves weighing the aggravating and mitigating factors arising from the research conducted during the investigative process. Financial institutions should draft procedures that document the factors to consider when determining whether a suspicious transaction report (STR) is appropriate."

Reference: http://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_027.htm