What Is The Anti-Money Laundering Directive?
The AMLD (Anti-Money Laundering Directive) is a set of rules issued by the EU to help prevent money laundering and terrorist finance activity by EU member states.
Its rules apply to financial and credit institutions and persons or companies such as auditors, trust service providers, and notaries acting in a professional capacity on behalf of others.
Who Does It Impact?
Individuals and businesses in all EU member states (excluding Denmark and Ireland) will be affected. The UK has not implemented 6AMLD since it is no longer part of the EU. 6AMLD affects many industries, including gambling, real estate, financial institutions, and art trading businesses.
How does the 6th Anti-Money Laundering Directive differ from its predecessors?
The 6AMLD offers greater clarity to the definition of the types of crimes that might be considered money laundering or terrorist financing.
Unlike previous AMLD regulations, which only prosecuted those who directly profited, the new directive poses similar penalties for those who may be guilty of aiding and abetting this type of criminal activity. This directive has been put in place primarily to strengthen the fight against financial cybercrime.
A few of the key differences are noted below:
- Company heads may be personally liable for corporate crimes if adequate supervision was not deemed to have taken place
- Defining the 22 crimes linked to money laundering
- It will now be a chargeable offense to support or commit an act of money laundering
- A five-year minimum jail term may be imposed for serious offenses
- Penalties can be more severe where there is evidence of human trafficking involvement
- Extension of criminal liability to legal persons who commit offenses for the benefit of their organization
- Providing a detailed description of money laundering
- Imposing a minimum jail term for more serious crimes
What Should Affected Organisations Do First?
Every member state of the EU will have different requirements and laws, so it is crucial for organizations affected by this directive to establish what changes apply to them.
Once this is ascertained, a company-wide rollout should be implemented, ensuring that all the relevant alterations to policies and procedures are made.
All staff must be aware of these regulatory changes, and full training should be given. To ensure that new procedures are being enforced, regular assessments should be carried out, and technology and software modifications implemented where necessary.
What If You Don’t Comply?
Under the new directive, businesses can face sanctions if their employees commit or attempt to money launder. Sanctions may include seizure of assets, withdrawal of any public funding, or, in extreme cases, may result in the closure of a business. Senior management may also be penalized or held accountable, so there is a far greater onus on them to monitor business activity on a regular basis.
The 6AMLD was to be fully implemented by June 2021 and should result in reduced levels of money laundering and financial cybercrime across the board.