The European Union's fifth Anti-Money Laundering Directive has added to the multitude of firms and people who must report their suspicions to the authorities, but it contains some ambiguities that relate to the true nature of a ‘money laundering offence.’ Another directive is hot on its heels.

EU countries have until 3rd December to enshrine the upcoming sixth Anti-Money Laundering Directive in their laws. Reporting (i.e. regulated) entities in the EU have a deadline of 3rd June 2021.

It is worth mentioning that Britain has decided not to enact this Euro-law as the Government believes that British law already follows nearly all of its precepts. In many cases, it argues, British law already goes much further.

MLD VI concentrates on the definitions of various types of economic crime and various sanctions connected to them. It also aims to make EU countries collaborate more closely with one another when tackling money launderers.

This article explores the four main points of the directive.

1. The money laundering offence explained and extended

What constitutes a ‘money laundering offence’? Article 3(1) specifies the types of conduct that will be punishable as criminal offences when it is enshrined in national laws. One prominent example will occur when there is a transfer of property and the transferor (whoever that may be) knows that it is derived from ‘criminal activity’ and his purpose is to conceal or disguise its illicit origin. This will now constitute an EU-wide money laundering offence.

MLD VI will also, when it becomes enshrined in national laws, narrow ‘criminal activity’ down to twenty-two predicate offences. If someone is to be found guilty of a money laundering offence, at least one of these predicate offences (listed in Article 2(1)) will have to be evident.

Two predicate offences on the list are cyber-crime and environmental crime. This is the first time that ‘cyber-crime’ is mentioned in any AML directive.

Additionally, the directive seeks to extend the EU offence of money laundering to ‘aiding and abetting’ (Article 4). The aim of this measure is to force every EU country to convict accomplices who aid people in their commission of money laundering offences.

2. Criminal liability for 'legal persons' and concomitant sanctions

If any people in an organisation commit a money-laundering offence and/or aid and abet anyone who launders money for a company’s benefit, the directive aims to extend criminal liability to that organisation/legal person/company.