Industry NewsThe 6th Money Laundering Directive

25th February 2021Manisha Chauhan2
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It seems only yesterday that the 5th Anti Money Laundering Directive came into effect although it was just over one year ago in January 2020 (how time flies!)

 

The new 6AMLD came into effect on 6th December 2020 but the deadline to comply with the Directive is 3rd June 2021 and applies to all relevant financial institutions. The below is a list of those who are required to comply with 6AMLD, although the list is not exhaustive:-

  • Banks and credit institutions.
  • Stock brokers and investment firms.
  • Insurance companies and insurance intermediaries.
  • Auditors, accountants, book-keepers, tax advisors.
  • Property dealers and estate agents.
  • Trust or company formation and management.
  • Legal services.
  • Companies trading in goods for cash of at least £13,000.
  • Auction platforms.
  • Crypto currency trading platforms and brokerages.
  • Art dealers with cash transactions.

This directive is seen to be much tougher than the regulations that were announced in 5AMLD and more emphasis is placed on financial institutions to fight against money laundering and terrorism.

Some of the key provisions the 6AMLD covers are:

  • Harmonising the definition of money laundering across the EU – the list of offences has been increased by a further 22 offences which are included as part of this directive and now constitute money laundering. The purpose of the list of offences is to remove any loopholes in our current regulations which may allow criminals to escape prosecution. For example, one of the offences that are included within the list of offences is cybercrime.
  • Liability – the new directive aims to extend criminal liability to include legal persons such as partnerships and even companies. It also covers those who are acting on the company’s behalf i.e. consultants, lawyers and accountants. This means that a legal person can be found guilty of money laundering. Previously only individuals and organisations that benefited from money laundering were prosecuted so this is a big change as it now extends to anyone. The new directive also takes into account acts of omission too i.e. where a director has failed to put strict compliance policies and controls in place to identify and prevent the crime
  • Stronger punishments – the new directive changes the minimum prison sentence from one year to 4 years for money laundering offences and also fines can be given. The 6AMLD also includes severe punishments for corporate and individual offenders i.e. disqualification or even the closure of the establishment which was used to commit the money laundering offence.
  • Cooperation among member states – under the new directive, member states are required to co-operate with each other with regards to prosecution of money laundering offences. As an example, if a money laundering operation is taking place across 2 different member states, both states should work together to identify the operation and prosecute as required.

You may be wondering what significance this has on you since we are no longer part of the EU. Although the UK has opted out of complying with any further AML regulations, it is important to add that any UK regulated businesses in the finance sector will need to comply with this new directive.

 

Manisha Chauhan

Manisha joined the Technical Advice Team in July 2019 having previously worked as an Employment Solicitor in Warwickshire before relocating to Lincolnshire. Manisha provides advice on technical queries daily and works alongside Siobhan Smith also providing ongoing support on Sure Will Writer.

2 comments

  • David Gee

    26th February 2021 at 4:41 pm

    Hi does this directly affect Will Writers.
    My previous understanding was that if my business was trading under £100k then it was not mandatory to collect client ID.
    Has this changed

    Reply

    • Manisha Chauhan

      2nd March 2021 at 10:59 am

      Hi David,

      This is not something we have ever been aware of.

      As a will writer, you are required to take all reasonable and proper precautions to verify the identity of your client and that the instructions you take come from that person. This is in accordance with the Money Laundering Regulations 2007.

      Before you proceed with taking the instructions from the client, you should obtain 2 form of I.D. from each of your clients. One must be photo ID and the other must be a proof of address. We have an article coming out shortly which focuses on the I.D you should obtain from your clients so watch this space.

      Reply

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