The 6AMLD deadline for financial institutions and other obligated entities is June 3. What changes does the new directive bring, and are you ready for them?
While the European Union’s Sixth Anti-Money Laundering Directive (6AMLD) first came into effect for member states on December 3rd of last year, the deadline to implement and adhere to the new rules is now right around the corner for financial institutions as well. This new directive, which follows 5AMLD, aims to empower companies and authorities to do more in the important fight against money laundering and terrorism financing by expanding the scope of existing legislation, toughening criminal penalties, and clarifying certain regulatory details.
Changes that 6AMLD brings
With 6AMLD needing to be implemented by June 3, let’s take a look at what banks, financial institutions, and other obligated entities need to be aware of and adhere to beyond that date, and examine what changes compliance teams will need to make.
22 predicate offenses
In an effort to remove loopholes in domestic legislation of certain member states, 6AMLD provides a harmonized list of the 22 predicate offenses that constitute money laundering. Come June 3, firms within member states need to ensure that their AML programs can deal with the new risk environment.
Enablers are legally culpable
Prior to 6AMLD, money laundering regulations punished only those who profited directly from the act of money laundering. With the new directive, so-called enablers will be legally culpable as well, which essentially means that anyone who is helping money launderers is also committing a crime. Moving forward, firms now need to ensure that their compliance programs are set up to detect and prevent the aiding and abetting of money laundering as part of their AML response.
Companies are criminally liable
With 6AMLD, criminal liability for money laundering is being extended beyond individuals, and will include punishment of legal persons, such as companies or partnerships. In essence, the new rule is intended to hold larger companies accountable, and in turn combat money laundering on a much grander scale. Organizations that do not implement proper AML procedures may suffer a temporary ban on operations, or even risk permanent closure.
Tougher punishment
While the minimum prison sentence for money laundering offenses used to be one year, the introduction of 6AMLD will see the punishment minimum increase to four years of prison time. The new terms are a part of the EU’s effort to bring consistency to AML regulation across all member states.
Fighting dual criminality
Last but not least, 6AMLD also addresses the issue of dual criminality by introducing specific information sharing requirements between jurisdictions, so that criminal prosecution for the connected offenses can take place in more than one EU member state. In practice, this means that member states have a responsibility to criminalize certain predicate offenses whether they are illegal in that jurisdiction or not. Those offenses are terrorism, human and drug trafficking, sexual exploitation, racketeering, and corruption.
Are you ready for 6AMLD?
To be ready for 6AMLD, financial institutions need to make sure that they really know their current and potential customers. This requires access to billions of reputable data streams and global consumer records, including government agencies, credit agencies, and utility records. Having access to such data will allow you to cross-check and verify key information, which is an essential part of any effective and robust KYC/AML screening. Thankfully, we’re here to help you with that.
If you have yet to take action and need a user-friendly, quick, and efficient solution, we can provide it for you. ZignSec offers expert support and can assist you in adapting to new regulations, just like 6AMLD. We’re ready to help you update and modernize your user relationship processes and fight against money laundering, in addition to reducing bureaucracy and costs related to customer relationships.
Let us show you what we can do
Contact us at sales@zignec.com or book a demo today to learn more, so we can help you get your ducks in a row prior to June 3.