Dec 30, 2019
AML6, an additional step against money laundering
AML6 or 6AMLD (sixth Anti-Money Laundering Directive) represents the next step in European regulations on money laundering and terrorist financing. In a recent article, we delve into the status and evolution of the fifth European Anti-Money Laundering Directive (AML5), the current Directive.
Now the European Commission proposes AML6, the next step:
What is AML6?
AML6 or 6AMLD (sixth Anti-money Laundering Directive) is the 2018/1673 Directive of the European Union. This norm advances in what is already established in 5AMLD and implies an important and decisive development in certain areas of the law.
AML5, with strict application as of January 10, 2020, establishes the reference framework for KYC (Know Your Customer) processes in Europe and enables financial companies to provide services in a digital single market with 508 million consumers. Barriers to doing business in multiple industries and markets where there was high fragmentation before were removed.
The current criminal framework against money laundering within the EU can properly be described as a mosaic of regimes and regulations rather than as a complete body. This system has led to a lack of legal clarity in certain individual cases and the lack of recognition of some crimes and security breaches by companies.
AML6 seeks to address these problems by hardening the definitions of offences and penalties so that cases do not remain unsolved and includes the evolution of corporate responsibility.
AML6 sets its own deadline on December 3, 2020, for its implementation and full development.
Changes in the new Directive
6AMLD establishes three points to consider aggression: a criminal activity, the acquisition of any property through criminal act and the laundering of it. The new Directive also establishes and classifies as crimes the different methods of illegal acquisition of goods and money.
Article 7 of the new AML6 Directive focuses on what RegTech companies are working, corporate responsibility and identification: It specifies and sets that legal persons should be considered responsible in conditions where the“lack of supervision or control” by an actor with a “leadership position” has made the criminal act possible. That’s why high-security online identification processes are so important.
In the same direction, Article 10 focuses on the application of sanctions and jurisdiction to reduce legal issues and confusion. For example, during 2017, U.S. federal regulators fined US divisions and subsidiaries of Asian financial institutions and banks for almost $110 million for inadequacies in their processes.
Articles 5 and 8 of AML6 focus on sanctions; for both companies and individuals:
- Denial of the right to governmental benefits or support and provisional or permanent prohibitions to access public funds; including grants and concessions.
- Temporary or permanent disability for commercial activities.
- Imposition of judicial surveillance.
- Judicial closure orders and temporary or permanent closure of establishments.
- Criminal punishment that could result in the imprisonment of responsible professionals.
AML5 already contemplates these measures focused on sanctions for both business and potential criminals, but AML6 advances in its control and hardening.
Download this simple guide on AML5 and do not risk at your KYC processes.
Therefore, AML6 introduces the following sections as key amendments:
Technological capability and resources to be compliant
All organizations and companies that see their activity regulated and affected by this standard must develop technological procedures to comply with AML6 requirements, and recognize risk factors to avoid crimes. It is mandatory to have the necessary technological capacity in the processes (KYC, for example) to comply with the Directive.
Helping, inciting, trying and executing
These acts of aid, incitement and predisposition to crime committing also constitute aggression and are punishable as a criminal offence.
Unified predicate offences
A total of 22 crimes have been established within the norm from those related to digital crime to tax crimes. It is mandatory to establish safe KYC procedures to identify them.
Criminal liability for legal persons
Crimes can be associated with both a legal entity (entity, company) or natural person (individuals). This responsibility is attributed to company executives and employees.
Greater penalties for money laundering offenses
The minimum penalty for crimes related to money laundering increases from one to four years in prison. Similarly, economic sanctions rise to 5 million euros (and their equivalents in other currencies). AML6 also encourages authorities to impose exemplary sanctions.
Cooperation between EU states is extended
AML6 describes procedures for cooperation between states for the detection of financial crimes and cross-border aggression. Likewise, international surveillance is established for companies that do not comply with the directive.
Electronic IDentification (eID) and AML6
Electronic IDentification (eID), Europe’s leading digital identification company, has created a range of solutions driven by AI and machine learning that are helping companies fully comply with the current AML5 regulation today.
In the same way, it works hard to ensure that all its solutions comply with the most stringent regulations regarding security and money laundering. All eID electronic identification solutions will also be compliant with 6AMLD.
eID is granted as the reference partner for companies that want to digitize and improve their customer relationship processes in addition to strictly complying with current regulations.
Electronic IDentification has developed a set of documents called “AML5 Starter Kit”, which allows adopting the standard in a simple way and in record time, taking into account risk analysis, qualification and adoption of legislation.
Request a demo of VideoID, our Video IDentification solution that 100% complies with AML regulations.