A Guide to Anti-Money Laundering for Crypto Firms
6AMLD is due to be transposed into law on 3 December 2020. Given the issues that many countries have had with implementing both 4AMLD and 5AMLD, we’ve put together a report on the latest directive from the European Union to guide you through it.
Our report takes a closer look at the reasoning behind all of the anti money laundering directives set down by the EU since 1991 and examines what 6AMLD is bringing to the table.
All the Changes
We examine the changes enacted by 6AMLD and what they mean for financial institutions (FIs) across the EU.
We looked at the 22 new predicate offenses, what they cover and what they mean for AML efforts across the EU. Dual criminality has been made much simpler to determine for many compliance officers thanks to the new list of offences. It’s a progressive step towards real regulatory harmony across the EU member states and we discuss how 6AMLD actively encourages international cooperation.
Liability has also been extended thanks to the new directive, it’s no longer an issue for individuals in a business to be concerned with alone. Changes to who’s criminally at fault for an AML/CFT breach may see businesses and FIs held liable for these scandals as well as those directly responsible. Senior level directors and boards will no longer be able to use their internal distance in a company to wash their hands of AML/CFT requirements.
Alongside increased liability, there’s also been an increase in the associated punishments for AML breaches. Prison sentences are now a real possibility and we explain how to make sure you’re not serving one or suffering one of the other many new penalties.
Opportunities of 6AMLD
Audits are going to become commonplace thanks to the new directive. Every individual business affected by 6AMLD will need to conduct an audit to make sure they meet its requirements. This will surely mean a great deal of work for the big four accounting firms but could also see some real internal changes at many businesses.
The audits will closely examine new and high risk areas for businesses, looking at them via an enterprise wide risk assessment (EWRA), the risk appetites and thresholds for the business, a close examination of policies procedures guidance and training already in place and the platforms and controls used to meet AML/CFT requirements.
It’s an extensive list of demands and will require rigorous work. Our report delves into the minutiae of each aspect.
Challenges and Future Developments
We will cover the unique challenges that are sure to arise due to jurisdiction, industry and sector. Britain, for example, will need to meet 6AMLD’s requirements as many aspects of it are already in UK law. Businesses which operate globally will also be affected by the directive but it will be interesting to see how far beyond their EU operations the changes are implemented and if it’s even possible for businesses to only implement the directive in EU markets.
However, no matter the business, all sectors will need to be aware of the legal consequences of failure to comply with this particular directive.
Finally, we take a look at whether or not 6AMLD will be the last directive to come from the EU. As the future of AML becomes more sharply defined will we see a push towards regulations handed down from the EU directly rather than directives which have been transposed at member states’ leisure? With the FATF 30 year strategic review coming up, and with it occurring under the German presidency, we may see a significant shift in how the EU tackles money laundering and financial crime as whole.
Originally published July 29, 2020, updated March 25, 2022
Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.
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