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Jul 14, 2022

6AMLD: 6th Anti Money Laundering Directive & 6 Key Changes

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6AMLD: 6th Anti Money Laundering Directive & 6 Key Changes

6AMLD (6th 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 6AML or AMLD6, the next step:

The 6th AML Directive EU is aimed at removing loopholes in the domestic legislation of member states by harmonizing the definition of money laundering across the EU. For the first time in an EU AML directive 6, cybercrime has been listed as a predicate offence.

What Is 6AMLD?

6th AML directive or 6AMLD 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 a strict application as of January 10, 2020, establishes the reference framework for electronic 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.

6th AMLD 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.

6AMLD set its own deadline on December 3, 2020, for its implementation and full development.

Download this report on AML5 and eIDAS, and meet the two game-changers in the European financial market that are unifying compliance.

Changes In the New 6AMLD Directive

6th AMLD establishes three points to consider aggression: a criminal activity, the acquisition of any property through criminal act and the laundering of it. The new AML 6 Directive also establishes and classifies as crimes the different methods of illegal acquisition of goods and money.

Article 7 of the new Anti Money Laundering Directive 6 focuses on what RegTech companies are working, corporate responsibility and identification: It specifies and sets that a legal person 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.

Meet the legally binding digital onboarding for Europe and operate in full compliance across the UE to sign up more than 500M new clients across Europe

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 the EU 6th money laundering directive 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 contemplatedthese measures focused on sanctions for both business and potential criminals, but the EU 6th AML Directive advances in its control and hardening.

Therefore, the 6th EU money laundering directive introduces the following sections as 6AMLD key changes:

Technological Capability and Resources to Be 6AMLD Compliant

All organizations and companies that see their activity regulated and affected by this standard must develop technological procedures to comply with EU 6AMLD 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 EU 6th directive AML, 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). The 6th EU AML directive also encourages authorities to impose exemplary sanctions.

Cooperation Between EU States Is Extended

The 6 AML Directive 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 6AMLD

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 and AML6 regulations today.

In the same way, its solutions ensure full compliance with the most stringent regulations regarding security and money laundering in the EU.

eID is granted as the reference partner for companies that want to digitize and improve their customer onboarding processes in addition to strictly complying with current regulations.

Electronic IDentification allows adopting the standard in a simple way and in record time, taking into account risk analysis, qualification and adoption of legislation:

  • Our patented technology of Qualified Electronic Signature and VideoID, meets the requirements for the highest level of security: a qualified international laboratory has evaluated our VideoID solution with this level supported by artificial intelligence and machine learning. VideoID helps companies comply with the 6th money laundering directive electronic verification.
  • Our AML5 & 6 solutions allow you to adopt the norm in a simple way, helping businesses and their legal departments to perform the necessary tasks: risk analysis, qualification, and adoption of the rule, and the production execution focused on acquiring new clients in record time.

Watch our open webinar on QES+ and learn how to achieve AML and KYC compliance during your customer onboarding process.

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