6AMLD is the EU’s most comprehensive regulation yet in the fight against money laundering. It gives authorities more power to prosecute and it heaves more responsibility on to businesses to comply.
Here’s the long and the short of 6AMLD
1. 6AMLD offers greater clarity in definitions of money laundering
Pre-6AMLD, the complexity in regulations was even greater because different Member States had fundamental differences in money laundering definitions, offences and punishments. These opened a sea of loopholes and interstate cooperation issues for criminals to exploit.
But 6AMLD puts every member state straight. It creates a broad but single definition of what constitutes a money laundering offence across the EU.
It stipulates that action must be taken against the following criminal offences.*
a) The conversion or transfer of property, knowing it is derived from criminal activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s action.
b) The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is derived from criminal activity.
c) The acquisition, possession or use of property, knowing at the time of receipt, that such property was derived from criminal activity.
6AMLD aims to criminalise money laundering when it is committed intentionally and with the knowledge that the property was directly or indirectly derived from criminal activity.
For clarity, awareness and understanding, 6AMLD also sets out the following predicate offences for money laundering. These are the crimes that generate the funds that consequently need to be laundered:
1. Organised crime and racketeering
2. Terrorism
3. Human trafficking and smuggling
4. Sexual exploitation
5. Illicit drug and psychotropic substance trafficking
6. Illicit arms trafficking
7. Illicit goods trafficking
8. Corruption
9. Fraud
10. Counterfeiting of currency
11. Counterfeiting of products
12. Environmental crime
13. Murder and grievous bodily injury
14. Kidnapping and hostage-taking
15. Robbery/theft
16. Smuggling
17. Tax crimes
18. Extortion
19. Forgery
20. Piracy
21. Insider trading and market manipulation
22. Cybercrime
Perhaps most significantly, to support the prosecution of those laundering money as well as entities that are either directly or indirectly facilitating it, 6AMLD requires aiding and abetting, inciting and attempting any of the above predicate offences to be punishable as a criminal offence.
2. 6AMLD adds environmental crime and cybercrime to the list of offences
Along with its new money laundering definitions, 6AMLD updates EU regulation to mirror some of the latest criminal trends. As listed above, this includes the addition of two new predicate offences for EU law: environmental crime and cybercrime.
The act of self-laundering is also punishable under 6AMLD for the first time.
The addition of aiding and abetting, inciting and attempting any of the predicate offences as a punishable criminal offence in its own right will also bring about great change. It will act as a significant deterrent to any association/assistance with money laundering activities for not just family, friends and associates, but also professional enablers in the accountancy, legal and professional services sectors.
3. 6AMLD increases liability to allow prosecution of both individuals and businesses
6AMLD introduces liability of legal persons – or in other words, any entity having legal personality under the applicable law. This includes companies.
The consequences mean that legal persons can be held liable for any of the above money laundering offences, regardless of whether they are acting individually or as part of the entity with power of representation, authority to take decisions and/or authority to exercise control.
What’s more, liability can be held where lack of supervision or control by such legal persons has resulted in a money laundering offence. Whether you’ve been directly or indirectly involved in money laundering, 6AMLD sets out to ensure justice can be achieved.
The punishments, which are detailed below, have the potential to have a devastating effect on individuals and businesses.
4. AMLD brings stricter prosecution and punishment
A maximum imprisonment term of at least four years (up from a minimum one-year term) is one of the biggest tools in 6AMLD’s toolbox for deterring those wanting to launder dirty money. But 6AMLD seeks to do more than this. It enables a range of sanctions and penalties containing criminal and non-criminal fines.
Several changes mean prosecuting money launderers will be easier than ever. Member States are also encouraged to impose additional sanctions or measures as well as more stringent rules to deter criminals.
These may include the likes of “fines, temporary or permanent exclusion from access to public funding, including tender procedures, grants and concessions, temporary disqualifications from the practice of commercial activities or temporary bans on running for elected or public office.”
Other sanctions include exclusion from entitlement to public benefits or aid, placing under judicial supervision, a judicial winding-up order and temporary or permanent closure of establishments which have been used for committing the offence.
There are several circumstances that will aggravate a money laundering offence:
1. Criminal organisation involvement.
2. Committing the offence while conducting professional activities.
3. The laundered property is of considerable value.
4. The laundered property derives from serious offences, such as terrorism, sexual exploitation and corruption.
What’s more, Member States are encouraged to consider more severe penalties for public office holders due to the wider impact of such money laundering offences.
5. 6AMLD brings increased cooperation to facilitate prosecution
6AMLD is removing barriers to prosecution and goes to unprecedented lengths to prevent offenders from hiding in a different country to escape punishment. To do so it will make criminal proceedings more effective and faster than ever due to the requirement for enhanced cooperation between Member States and third countries.
A conviction should also be possible without precisely determining which criminal activity generated the property, or for there to be a prior or simultaneous conviction for that criminal activity.
To address the act of dual criminality, prosecutions for money laundering should also not be impeded by the fact that the criminal activity was committed in another Member State or in a third country. The requirement for international cooperation remains and all obliged entities will be part of this.
6. 6AMLD recognises of the risk of virtual currencies
6AMLD recognises that the use of virtual currencies presents new risks and challenges from the perspective of combating money laundering. Member States need to demonstrate that those risks are addressed appropriately.
7. 6AMLD requires regulated entities to have access to tools, training and technology
To ensure the successful investigation and prosecution of money laundering offences, 6AMLD requires that those responsible for investigating or prosecuting such offences have access to the use of effective investigative tools for combating organised crime or other serious crimes.
In order to achieve this, sufficient personnel and targeted training, resources and up-to-date technological capacity should be available.
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