Understanding the new anti-money laundering regulations
The Sixth Money Laundering Directive was required to be implemented into national law across the EU by 3 December 2020. In some countries, such as Germany who implemented the Sixth Directive last month, this required a paradigm shift in how money laundering offences are prosecuted in Germany. The German law abandoned the concept of a catalogue of predicate offenses in favour of an ability to capture profits derived from any criminal activity.
What is the impact of the Sixth Money Laundering Directive in the UK?
In the UK, money laundering has already included the proceeds of any criminal activity for a few years. That’s why the UK has been less impacted by the Sixth Directive than other European nations as much of the AML regime in the UK is already compliant with the Sixth Directive.
One of the big things in the Sixth Directive is the extension of criminal liability for money laundering to cover corporate persons. Essentially, a ‘failure to prevent’ money laundering law in a similar vein to the ‘failure to prevent tax evasion’ which was implemented by the Criminal Finances Act 2017.
The UK Ministry of Justice has said they will put corporate criminal liability under fresh scrutiny in 2021. This means firms will need to consider how their AML procedures are embedded within company culture, as opposed to just a list of policies and procedures. Significantly more attention will likely be required for staff training at all levels, not just for regulated persons. Further, more of an effort from the board level and senior management will likely be required to demonstrate compliance.
However, given the Brexit transition process and the fact that the UK is already compliant with a great deal of the Sixth Directive, the UK withdrew from the transposition of 6AMLD. UK law also goes considerably further than the Sixth Directive requires in many areas. But the key ‘new’ offence of a failure to prevent money laundering law is not something that has been introduced into the UK yet, but certainly could be in the next year.
Money laundering regulators have been cracking down on firms that fail to have completed risk assessments. The results could run into fines, but also potentially criminal action under a ‘failure to prevent’ money laundering law. This would mean bosses and businesses who don’t invest time and effort in undertaking risk assessments and acting on those risks with mitigation procedures and strong AML compliance programmes, could face prosecution.
VinciWorks’ anti-money laundering training suite
VinciWorks strives to make its AML training more than simply a tick-box exercise. Our courses are packed with realistic scenarios, real-life case studies and every customisation option you can think of. We have everything from in-depth induction training to refresher courses and five minute knowledge checks.