Money laundering is a global issue that has the potential to undermine the integrity of any business, as well as the financial sector as a whole. Since many years, the EU has taken part in drawing up international AML legislative framework and standards to lead the fight against money laundering and financing of terrorism. On 12th November 2018, the European Parliament published the sixth Anti-Money Laundering Directive (6AMLD), i.e. a set of rules designed to strengthen further the global fight against money laundering, which Member States are required to transpose into national laws by December 2020 and to implement the new regulations by not later than June 3, 2021.
Before introducing the 6AMLD, it is first worth mentioning the changes which the 5AMLD introduced into the Maltese law.
On February 7, 2020, Act I of 2020 was published in the Government Gazette highlighting a number of amendments intended to transpose the 5AMLD into Maltese legislation as well as to reflect the recommendations made in the latest MONEYVAL Mutual Evaluation Report, while addressing the concerns raised by the Venice Commission regarding the constitutional arrangements and separation of powers in Malta.
The significant changes made to the PMLA include:
- The power of the FIAU to enforce cash restrictions
- A new threshold for the penalty publication regime: from Eur10,000 to Eur50,000
- A shorter procedure before the Court of Appeal
- The strengthening of standards for the selection of FIAU officials and staff
- A list of local prominent public functions for an easier identification of PEPs
Apart from enhancing Malta’s laws against the prevention of money laundering and terrorist financing, these measures seek to contribute further towards lowering risk levels in certain sectors.
The 6AMLD will bring some massive changes in order to fight money laundering and financing of terrorism. While the 5AMLD was mainly aimed to increase transparency, the 6AMLD lays down a uniform interpretation of the criminal offence of money laundering across the EU. Here’s an overview of some of the biggest changes which the 6AMLD will bring along:
1. A harmonized definition of a “Predicate Crime”. The 22 predicate offences that are outlined in the 6AMLD entirely reflect the changing nature of the money laundering landscape, and now include offences such as cybercrime, environmental crime and tax crimes.
2. Extension of criminal liability to legal persons, such as companies or partnerships, including persons acting on their behalf or persons having the authority to make decisions on behalf of /exercise control over a particular legal person.
3. Enhanced punishments for money laundering offences. The maximum imprisonment for money laundering offences will increase from one year to four years. Additionally, any sentence may be accompanied by sanctions and fines (up to 5M€), including the drastic shut-down of a business.
4. Cooperation. When two or more member-states claim jurisdiction for a money laundering offence, they shall cooperate in deciding which of them will prosecute the offenders, according to the directive.
In addition to presenting legal requirements for regulated firms, the 6AMLD should certainly be seen as an opportunity to strengthen anti-money laundering capabilities and for subject persons firms to become more efficient in dealing with financial crime risk.
….We may well see the 7AMLD appearing over the horizon soon!
For further information on this article, please contact the firm’s MLRO Stephen Balzan on [email protected] or the firm’s AML Executive Chiara Barbacci on [email protected]. ACT can help you understand the changes to the AML rules and how these can impact your business.