The 6th AML Directive is part of the new AML/CFT legislative package that aims to strengthen and harmonize anti-money laundering and counter-terrorist financing rules across the EU.

All Member States, except Denmark, have fully transposed the 6th AMLD into national laws.

 

Why was the 6th AML Directive needed?

In July 2019, following a series of big money laundering scandals, the EU Commission decided that the existing AML/CFT framework was ineffective and needed improvement.

As a result, on 20 July 2021, the Commission published a new AML/CFT legislative package, including the 6th AML Directive and three other proposals.

The new Directive aims to deter money laundering by establishing harsher sanctions for criminals and punishing those aiding and abetting them. Not to mention, it also contributes to closing loopholes due to discrepancies between the EU countries’ national laws by introducing:

  • an EU-wide definition of what constitutes a money laundering offence
  • increased cooperation between EU countries

 

What’s new in the 6th AML Directive?

The five main changes introduced by the 6th AML Directive are:

1. EU-wide definition of money laundering offences

The 6th AMLD defines 22 predicate offences for money laundering, thus ensuring that the same money laundering offences are punishable across all EU states.

The list includes traditional crimes such as human trafficking, migrant smuggling, and drug trafficking, as well as emerging threats such as cybercrime and environmental crimes.

2. Criminal sanctions for aiding and abetting money laundering

Under the 6th AMLD, encouraging or helping a person to commit money laundering is punishable as a criminal offence.

Consequently, accomplices now face criminal penalties for intentionally assisting or encouraging criminals to commit money laundering.

3. Corporate criminal liability

The 6th Anti-Money Laundering Directive extends criminal liability to legal persons.

Accordingly, if a company fails to prevent money laundering due to a lack of supervision or control, both the company and its senior management will be held liable.

Punishments range from temporary bans on operations and placement under judicial supervision to the permanent closure of the business.

4. Harsher penalties

The new Directive increases the maximum prison sentence for money laundering from one to four years. However, EU countries are encouraged to take additional sanctions or measures, where necessary.

Additional sanctions may include but are not limited to fines, exclusion from claiming public funds, disqualification from practising commercial activities, bans on running for public office, and winding-up orders made against the company.

5. Increased cooperation between EU countries

The 6th AML Directive also sets out cooperation requirements between member states to ensure the efficient prosecution of criminals who committed the crime in one country but laundered the proceedings in another.

The two countries will have to share information, assist each other, and determine which of them should prosecute based on:

  • the country in which the criminal committed the offence
  • the nationality of the criminal
  • the home country of the victims
  • the country in which the criminal was found

 

How can Penneo help your business comply?

Businesses and their senior management can now be held legally responsible for failing to prevent money laundering. Therefore, obliged entities need to take AML/CFT compliance more seriously than ever.

Penneo KYC is a digital solution that helps companies comply with KYC requirements, including customer due diligence measures and data protection/retention.

With Penneo KYC, you can collect customer information and official identification documents in a secure manner. All data is encrypted to prevent unauthorized access.

The solution also screens your customers against business registers and PEP/sanctions lists and retrieves all relevant information. Not to mention that the guided risk assessment makes it simpler and faster for you to determine the risk of money laundering associated with your client.

All KYC data collected via Penneo is securely saved in the cloud and can be easily retrieved and made available to relevant authorities, if necessary.

When a business relationship ends, Penneo schedules the automatic deletion of all KYC documents after five years. This ensures compliance with both AML and GDPR data retention rules.

Penneo KYC can help you reduce manual work, cut the cost of compliance, and minimize human error. Get a free trial today!

 

 

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