As a business owner, it is vital to ensure you are doing everything possible to comply with all applicable regulations. According to Europol, 2-5% of GDP is laundered yearly. 6th AML Directive (or 6AMLD) is a European regulation intended to widen the scope of money laundering offences.
Companies in EU member states will receive sanctions if they do not comply with the latest anti-money laundering directive. 6AMLD allows European Union countries to provide tougher penalties for individuals and companies who do not comply with these rules. All companies that are affected by this standard must comply with the latest EU 6AMLD regulations and identify risk factors that could lead to crime.
Anti-money laundering compliance should not come at the expense of running your business. Read on to find out how you can put anti-money laundering solutions in place to protect your organisation.
Money laundering is against the law under the Proceeds of Crime Act (2002). Current counter-terrorist financing (CTF) measures are implemented to stop criminals from abusing the financial system and remove loopholes in domestic legislation. The Anti-Money Laundering Directive (AMLD) is a protective measure set out by the European Union (EU) to strengthen the framework against money laundering and terrorist financing.
However, many businesses view money laundering sanctions and fines as running costs. The new 6th EU AML Directive seeks to assign corporate responsibility by holding companies liable if they fail to comply with anti-money laundering regulations.
6AMLD is an updated version of the 5th Anti-Money Laundering Direction (5AMLD). The 6th version gives more clarity on money laundering offences with the introduction of 22 predicate offences. Article 3 (1) provides a new definition of what constitutes a money laundering offence.
Cybercrime and environmental crime are among the 22 predicate offences mentioned for the first time in the 6AMLD. It is important to track online activity with technological procedures such as Know Your Customer (KYC) to prevent fraud and other illicit activity.
Article 8 specifies sanctions for anyone who commits money laundering offences which include:
• Temporary or permanent closure
• Criminal punishment or imprisonment
• Removal of rights to government funds and financial support
• Judicial surveillance
The European Union wants to extend the greatest sentence for money laundering activity. Article 5 in the Directive states that an individual could face up to four years in prison whereas the previous term of imprisonment was one year in the 5th AMLD Directive.
In addition to that, employees should understand the money laundering offences laid out in 6AMLD. Companies could be liable for employees who engage in criminal activity.
Additional training and smart technology will enable your organisation to remain compliant with 6AMLD. You can reduce the time and effort spent on ID verification by using a streamlined screening process.
Firms should implement enhanced due diligence for higher-risk customers. Update your company policies and procedures to follow the prevention of Money Laundering Act and Criminal Code.
Anti-money laundering compliance is vital to reducing the risk of becoming involved with criminal activity and terrorism. Businesses should review their AML processes to ensure they are AML compliant. Financial service providers could face profound consequences for assisting criminals with money laundering.
Knowing your customers is vital if you want to prevent criminal activity within your organisation. Talk to an advisor at MemberCheck to identify money laundering and terrorism risks within your business.