No Match Found
The European Union has been making significant efforts to combat the laundering of money and terrorist financing within its Member States. Shortly after issuing the 5th Anti Money Laundering Directive (5AMLD), on the 23 October 2018 the EU further reinforced its mission by issuing the 6th Anti Money Laundering Directive (6AMLD). With the implementation deadline (3 June 2021) now on our doorstep, are Subject Persons prepared to handle what lies ahead?
One of the key aspects of the 6AMLD is the harmonisation of the definition of what constitutes a money laundering offence. The importance of this fact is that with this harmonisation, the Union will close some of the loopholes of interpretation between the different Member States domestic legislation making the fight against illicit actors a more homogeneous one throughout.
The 6AMLD shall introduce 22 predicate offences, including most notably, cybercrime and environmental crimes. The introduction of such crimes shows the EU is becoming more sensitive to what is happening within its confines and is taking a more proactive stance.
6AMLD widens the list of offences so that “aiding and abetting” will now also be punishable as criminal offences. The existing framework seeks to punish those who profit directly from the act of money laundering but under the 6AMLD, the “enablers” will be equally guilty.
More than ever, Subject Persons need to ensure that their AML/CFT frameworks are geared to detect and prevent the aiding and abetting of money laundering.
By means of this extension, both the legal persons and the decision empowered people within a company or partnership, including persons acting on the entity’s behalf or persons in a position to take decisions or exercise control, shall also be liable of criminal charges. This means both the entity and individuals can be subject to punishment if they fail to take-action against the criminal activity.
The sanctions to be now imposed show the EU is taking this matter very seriously. Penalties will not be limited to prison terms but also exclusion from public benefits or aids, exclusion from access to public funding including tenders and grants, disqualification from carrying out commercial activity, judicial supervision, winding-up orders, closure of establishment, and freezing and confiscation.
Prison sentences have also been increased and can go up to at least four years, and where deemed necessary, Member States are being asked to include additional sanctions or measures.
This Directive addresses the issue of dual criminality, which is the principle that a predicate crime may take place in a different jurisdiction to where the funds are eventually laundered. The 6AMLD introduces specific information sharing requirements between jurisdictions so that connected offenses can be prosecuted in multiple member states. States involved will be working together to centralise legal proceedings by considering factors such as territory, nationality, country of residence of the offender, country of origin of the victims and territory on which the perpetrator was found to determine the jurisdiction where to conduct prosecution.
To a large extent, the 6AMLD provisions are already embedded in Maltese legislation. The main changes to be expected will not be revisions of the local legal framework but the application of provisions already included in the Prevention of Money Laundering Act and Criminal Code.
As such, it is imperative that as part of the 6AMLD preparedness, Subject Persons ensure that their own internal governance and monitoring frameworks are in place and working effectively. Training is also another key factor to ensure that from the most junior to the most senior officer, there is a proper understanding of the applicable obligations.
Prevention is better than cure and our Financial Crime Compliance Team can help you gear up for all this. Feel free to reach out to us for more information.