The sixth European Anti-Money Laundering Directive (Directive (EU) 2018/1673 on combatting money laundering by criminal law - 6AMLD) was adopted on November 12, 2018. This Directive supplements the Fifth Anti-Money Laundering Directive (5AMLD), which was adopted in the same year. EU member States were required to harmonize their national AML/CFT legislation in accordance with the provisions of 6AMLD by the summer of 2021.
AMLD6 seeks to close loopholes in anti-money laundering measures in EU member states, increasing the amount of responsibility for those found guilty of committing offenses.
According to AMLD6, criminal liability can be applied to "legal entities" such as companies and partnerships. Firms may be criminally liable for the actions of employees engaged in criminal activity. The purpose of this provision is to force financial services companies to take on more responsibility for struggling money laundering.
6AMLD develops the concept of a "predicate" (prior) crime, introduced into the AML standard on the initiative of the FATF international organization back in 2012. This concept designates a crime as a result of which a person receives criminal income, and, therefore, serves as the basis for the obligation of all AML entities to track not only directly criminal income, but also income obtained criminally at the previous stage of the movement of funds.
According to the Directive, the initiators of crimes, accomplices and instigators are accomplices, and aiding, abetting and "self-washing" are now also considered criminal offenses. EU States are obliged to qualify aiding, abetting, and attempting to commit a crime ("aiding, abetting and attempting") as criminally punishable acts.
The innovation of 6AMLD is also the establishment of the obligation of EU member states to consider the legalization of their own income ("self-laundering") as a crime in the field of money laundering. This kind of crime occurs when actions aimed at legalizing criminal proceeds are carried out by a person who has committed a predicate crime, in particular, by transferring property obtained as a result of criminal activity into circulation and thus concealing its illegal origin. A practical example is the use of "dummy" companies to conceal the profits of an organization from taxation and non-payment of VAT with the subsequent purchase of various goods and services, property.
Also, the Sixth EU Directive covers the issue of double criminalization, prescribing EU member States to recognize certain "predicate" crimes discussed above, even if they do not violate the law in this jurisdiction. 6AMLD establishes a number of factors that authorities should consider when deciding how and where to prosecute, including the country of origin of the victims, the nationality (or residence) of the offender and the jurisdiction in which the offense was committed. 6AMLD establishes a number of factors that authorities should consider when deciding how and where to prosecute, including the country of origin of the victims, the nationality (or residency) of the offender and the jurisdiction in which the offense was committed.
New EU directives on countering money laundering and financial terrorism are currently expected to be adopted. Financial control by regulators will only increase, so we recommend that organizations respond to these changes in advance with real actions, such as retraining their personnel responsible for compliance with regulatory requirements and reviewing their current KYC and KYB processes.
