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.

With money-laundering charges about to fall on legal persons, strict sanctions and penalties are in the offing. Some will take the shape of criminal and non-criminal fines. Article 8 lists other punitive sanctions, namely: disqualification from the practice of commercial activities (temporarily or permanently); judicial supervision; exclusion from accessing public benefits and funding; and/or the closure of the establishment that the money launderers have used.

3. Heftier penalties for people

It is also worth noting that every ‘natural person’ will now face a maximum term of imprisonment of at least four years for committing a money-laundering offence. In other words, the very highest money-laundering prison sentence on every EU country's statute book cannot be lower than four years. The EU is going to require its subject nations to increase this from the present one year. It is worth mentioning that many EU member states already hand out far higher sentences than four years even for minor offences.

4. Co-operation between countries

Finally, the upcoming directive insists on collaboration between EU states in the prosecution of people and firms who are conducting money-laundering offences.

For example, in Article 10(3), if a money laundering offence has occurred within the jurisdiction of more than one member state, those states will be obliged to pick one of their number as the co-ordinating jurisdiction. In other words, they will have to centralise proceedings in one country.

The directive also lists the factors they ought to consider when reaching this decision. These consist of the territory where the offence was committed, the nationality or residency of the offender, the country of origin of the victim(s) and the territory in which the authorities found the offender.

[Editor's note: the predicate offences for money laundering, listed in Article 2(1), are: racketeering; terrorism; people trafficking; sexual exploitation; illicit trafficking in drugs; illicit arms trafficking; handling stolen goods; corruption; fraud; the counterfeiting of currency; the counterfeiting of products (the EU is run more and more for the benefit of big business); environmental crime; murder and grievous bodily harm; kidnapping; robbery or theft; smuggling, where different from the trafficking of people and illegal arms and drugs; tax crimes; extortion; forgery, where different from counterfeiting; piracy; insider dealing and market manipulation; and cyber-crime. This is the first time that cyber-crime has appeared in a money-laundering directive.]

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