Harmonisation, transparency and the on-going fight against money laundering offences stems from the efforts to eradicate any loopholes of interpretation to mitigate episodes of money laundering across Member States.
The 6th AML Directive (6AMLD) and fight against money laundering
Money laundering, financing of terrorism and organised crime are criminal hurdles afflicting a whole nation which may throw a country into anarchy and bankruptcy.
Reputation, stability and integrity are critical aspects which may come under threat if the internal security of a nation gets exposed. In response to such criminal activity, the European Union's fight will undoubtedly gear up a further notch as the 6th Anti-Money Laundering Directive is transposed into law across all EU Member States.
Coherence and logistics are believed to be the compass of "smooth sail" as the European Parliament believes that measures adopted at national level will not be enough unless there is a clear coordinated joint effort. The new AML Directive aims to combat money laundering by means of transposing more flexible tools for efficient transnational cooperation between the competent authorities.
Focus of the 6th AML Directive
The main purpose behind the new Directive is the introduction of 22 base offences which shall include cyber and environmental crimes, which is also in sync with the European Union main efforts and priorities.
6AMLD aims to have a uniform formula to prosecute criminal activities more effectively thus ensuring money laundering activities are subject to harsh penalties.
It is compulsory for EU Member States to criminalise money laundering arising from 6 specific base offences: the participation in an organised criminal group and racketeering; terrorism; human trafficking and migrant smuggling; sexual exploitation (incl. children); illicit trafficking of narcotics & psychotropic substances and corruption.
A money laundering offence shall be punishable if: purchased property is utilised for the purpose of concealing or disguising the illicit origin of the property or to assist any person who is involved in the commission of such activity to evade the law; disguising the true nature, source, location, disposition, movement, rights with respect to, or ownership of such property, knowing that such property is derived from criminal activity.
The extent of the Directive
The Directive will also extend the concept of criminal liability to legal persons. Those responsible to oversee regulatory matters who fail to stop illicit activity conducted by anyone within the company, will be subject to the full extent of criminal penalties.
Member States are also required to update on a regular basis how money launderers are being convicted. The maximum imprisonment term is capped to at least 4 years for the above mentioned offences. However, any related sentence may be subject to effective or proportionate sanctions, which may also be combined with fines.
To further complement such harsh penalties, prosecuted individuals will be prohibited from public welfare benefits, bans from conducting business or forced to wind-up businesses through which the offences were committed.
IMPORTANT NOTE: Regulated entities within the European economic zone will have until January 2021 to implement the regulations.
It is clear what avenue the EU is heading - uniformity and transparency. In due course, we may even see a 7th AMLD to reinforce further the European bloc. It is a fact - cryptocurrency is on the EU's radar, thus inevitably this domain will require increased regulation on providers yet not fully provided for by the 5th AML Directive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.