Hot on the heels of the 5th the EU is preparing the industry for the introduction of 6AMLD- 6th Anti Money Laundering Directive.
But what does it mean, who does it impact and what is it focusing on? read on for more…
6AMLD is designed to harmonise the law and definitions across the EU and tighten regulations around jurisdiction and business. It aims to improve inter-jurisdictional cooperation. It will replace 5AMLD. It becomes law on the 3rd December 2020 and must be implemented in EU jurisdictions by the 3rd June 2021.
The main implications are;
The number of predicate offences is widening. To see a full list go here.
A predicate offence must be imprisonable.
There will be no need to prove the predicate offence to prove the laundering of criminal property.
However, there must be an intent and knowledge the money was being laundered.
This can be shown by the asset value being disproportionate to the suspected launderers income.
The laundering must be timely to the criminal predicate offence suspected.
A court can base it’s decision on objective and factual evidence.
AMLD will address Virtual Currency
Punishments will be more severe for suspects working in a public role.
Punishments will be more severe for Suspects ‘self-laundering’.
Contact us for a full briefing on 6AMLD or read on…
The EU are pushing to include ‘reckless’ and ‘negligent’ actions to be punishable criminally. The directive says a jurisdiction ‘may’ enforce this type of action/inaction. For a criminal definition of these go here.
Evidence of communications over the internet will not be hampered by the servers being outside the jurisdiction of the EU. It will be the location of the sending device that will be culpable.
EU states must have a minimum sentence of 4 years (as a maximum).
Confiscations can take place for a person’s estate post mortem.
The ‘tools’ and investigative processes used by the police and enforcement agencies are set to get more effective. This is required set against the need to ensure human rights, the fact it is mentioned means the police are likely to use more technical means to track suspects physically and digitally.
For a list of criminal definitions and all relevant EU articles go here.
This directive is raising the bar in Europe. It addresses the difficulties getting states to share information on investigations, evidence and suspects and streamlines predicate offences. It allows states to prosecute for money laundering when a predicate offence has not been proven. This is a big hurdle to ML currently and a huge step forward.
In terms of financial, legal and consultative business 6AMLD increases risk. It is vital officers within institutes act diligently, in particular with CDD and EDD with the spectre of ‘negligence and ‘reckless’ actions or inactions causing a criminal investigation into the entity or natural person.
If you need help training your staff in the implications of 6AMLD, send us a message. We can train in in person, online or via webinar.
Aiding, Abetting, Inciting or attempting Money Laundering
What does aiding, abetting, inciting or attempting Money Laundering actually mean? See the definitions in UK law here…
I remember from my police training the term ‘aid, abet, counsel or procure’. Victorian sounding phraseology that relates to how a person can become culpable for the actions of a principal offender. Interestingly UK law doesn’t distinguish the sentence a person can get from the principal offender. It can be just as severe.
What is left out of that phrase is ‘conspiracy’. That too is a method of being complicit in even an impossible to commit crime.
Aiding/Abetting someone in a criminal act is littered across UK criminal legislation. It is a well understood and used aspect of criminal law by prosecutors.
It goes right back to 1861 when an act of parliament created the Accessories and Abettors act. Due to offences within that act being obsolete nowadays, the Criminal Law Act of 1967 was established.
In R v Betts and Ridley it was found that a person need not be actually present at the time of the commission of an offence to be culpable for it. That, alongside the 6AMLD from the EU caters for mobile devices being used in one jurisdiction while the actual criminality resides in another, even when the evidence is on a server in a third. Just using a mobile device to send a text, email, telephone call or other communication can render you culpable nowadays.
Aiding and abetting requires knowledge, intent, recklessness or negligence to become culpable. So virtually every action or inaction, if it can be shown the suspect was in a frame of mind to establish any one of those four concepts the suspect is likely to at least face a trial.
1 Attempting to commit an offence. (1)If, with intent to commit an offence to which this section applies, a person does an act which is more than merely preparatory to the commission of the offence, he is guilty of attempting to commit the offence. (1A)Subject to section 8 of the Computer Misuse Act 1990 (relevance of external law), if this subsection applies to an act, what the person doing it had in view shall be treated as an offence to which this section applies. (1B)Subsection (1A) above applies to an act if— (a)it is done in England and Wales; and (b)it would fall within subsection (1) above as more than merely preparatory to the commission of an offence under section 3 of the Computer Misuse Act 1990 but for the fact that the offence, if completed, would not be an offence triable in England and Wales.] (2)A person may be guilty of attempting to commit an offence to which this section applies even though the facts are such that the commission of the offence is impossible. (3)In any case where— (a)apart from this subsection a person’s intention would not be regarded as having amounted to an intent to commit an offence; but (b)if the facts of the case had been as he believed them to be, his intention would be so regarded,then, for the purposes of subsection (1) above, he shall be regarded as having had an intent to commit that offence. (4)This section applies to any offence which, if it were completed, would be triable in England and Wales as an indictable offence, other than— (a)conspiracy (at common law or under section 1 of the M1Criminal Law Act 1977 or any other enactment); (b)aiding, abetting, counselling, procuring or suborning the commission of an offence; (ba)an offence under section 2(1) of the Suicide Act 1961 (c. 60) (encouraging or assisting suicide);] (c)offences under section 4(1) (assisting offenders) or 5(1) (accepting or agreeing to accept consideration for not disclosing information about an arrestable offence) of the M2Criminal Law Act 1967.
Extended jurisdiction in relation to certain attempts. (1)If this section applies to an act, what the person doing the act had in view shall be treated as an offence to which section 1(1) above applies. (2)This section applies to an act if— (a)it is done in England and Wales, and (b)it would fall within section 1(1) above as more than merely preparatory to the commission of a Group A offence but for the fact that that offence, if completed, would not be an offence triable in England and Wales. (3)In this section “Group A offence” has the same meaning as in Part 1 of the Criminal Justice Act 1993. (4)Subsection (1) above is subject to the provisions of section 6 of the Act of 1993 (relevance of external law). (5)Where a person does any act to which this section applies, the offence which he commits shall for all purposes be treated as the offence of attempting to commit the relevant Group A offence.]
Conspiracy “(1)Subject to the following provisions of this Part of this Act, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either— (a)will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or (b)would do so but for the existence of facts which render the commission of the offence or any of the offences impossible,he is guilty of conspiracy to commit the offence or offences in question.”
Contact us if you need any assistance with the new 6AMLD provisions. We will deliver training in person, via webinar or learning portal.
What does reckless or negligence in law actually state? The law we refer to here is UK law. This is not meant as qualified legal advice, if you need legal advice you should seek an appropriate legally qualified attorney/lawyer.
Intent, recklessness or negligence are all elements of ‘mens rea’ – the mental state of mind of the suspect at the time of the offence. Criminal negligence is already recognised in UK law, most notably in Manslaughter but also as the sole basis of liability in driving offences.
For a murder, the mens rea is that of malice aforethought, a deliberate and sometimes premeditated killing. But the larger percentage of deaths result from situations where there is either no intention to injure another, or only an intention to inflict less serious injury.
The leading statement to describe ‘criminal negligence’ in English law, may be found in the statement by Lord Hewart CJ in the case of R v Bateman: “In explaining to juries the test which they should apply to determine whether the negligence, in the particular case, amounted or did not amount to a crime, judges have used many epithets, such as ‘culpable’, ‘criminal’, ‘gross’, ‘wicked’, ‘clear’, ‘complete’.
But, whatever epithet be used and whether an epithet be used or not, in order to establish criminal liability the facts must be such that, in the opinion of the jury, the negligence of the accused went beyond a mere matter of compensation between subjects and showed such disregard for the life and safety of others as to amount to a crime against the State and conduct deserving punishment.”
There is a need to be able to distinguish between those who happened to be present when another died accidentally or through misadventure, and those who have contributed to the death in a way that makes them criminally rather than merely morally responsible.
An example would be a guide taking children out on a lake and during the trip a storm overturns some of the boats and children die. If the storm was foresaw or the equipment was identifiably deficient the guide could be culpable for Gross Negligence Manslaughter.
The current test for establishing liability for negligence (as applied to manslaughter) was set out in: R v Adomako  3 WLR 288. The ‘Adomako test’ is;
“whether the conduct of the defendant was so bad in all the circumstances as to amount in their judgment to a criminal act or omission.”
Under English law, negligence amounts to a “breach of the duty of care”.
Criminal negligence is a complex issue as it exists in a variety of forms. As an example of this, criminal negligence can be established by constructive knowledge. This is where the suspect ought to have known his actions/inactions would lead to an offence. This is mostly prevalent in stalking offences.
The UK law already caters for negligence and recklessness in serious, less serious and strict liability offences.
What we can understand from this short introduction is this;
Precedent and definitions of negligence and recklessness are already prevalent in UK law.
It is a skip and a hop to transpose them into AML legislation/regulations
Actions or inactions that can be negligent/reckless
Customer due diligence and enhanced due diligence take on more responsibility due to this.
What do businesses need to do?
Train employees in what is reckless/negligent in law
The 6AMLD definitions to streamline Money laundering and predicate offences will help prosecutors to prosecute more offences than previously. Here they are.
For the purposes of 6AMLD definitions, the following apply:
‘criminal activity’ means any kind of criminal involvement in the commission of any offence punishable, in accordance with national law, by deprivation of liberty or a detention order for a maximum of more than one year or, as regards Member States that have a minimum threshold for offences in their legal systems, any offence punishable by deprivation of liberty or a detention order for a minimum of more than six months. In any case, offences within the following categories are considered a criminal activity:
(a)participation in an organised criminal group and racketeering;
(c)trafficking in human beings and migrant smuggling;
(e)illicit trafficking in narcotic drugs and psychotropic substances;
(f)illicit arms trafficking;
(g)illicit trafficking in stolen goods and other goods;
(j)counterfeiting of currency;
(k)counterfeiting and piracy of products;
(m)murder, grievous bodily injury;
(n)kidnapping, illegal restraint and hostage-taking;
(o)robbery or theft;
(q)tax crimes relating to direct and indirect taxes;
(u)insider trading and market manipulation;
‘property’ means assets of any kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or an interest in, such assets;
‘legal person’ means any entity having legal personality under the applicable law, except for states or public bodies in the exercise of state authority and for public international organisations.
Article 3 6AMLD definitions
Money laundering offences
1. Member States shall take the necessary measures to ensure that the following conduct, when committed intentionally, is punishable as a criminal offence:
the conversion or transfer of property, knowing that such property is derived from criminal activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s action;
the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is derived from criminal activity;
the acquisition, possession or use of property, knowing at the time of receipt, that such property was derived from criminal activity.
2. Member States may take the necessary measures to ensure that the conduct referred to in paragraph 1 is punishable as a criminal offence where the offender suspected or ought to have known that the property was derived from criminal activity.
3. Member States shall take the necessary measures to ensure that:
a prior or simultaneous conviction for the criminal activity from which the property was derived is not a prerequisite for a conviction for the offences referred to in paragraphs 1 and 2;
a conviction for the offences referred to in paragraphs 1 and 2 is possible where it is established that the property was derived from a criminal activity, without it being necessary to establish all the factual elements or all circumstances relating to that criminal activity, including the identity of the perpetrator;
the offences referred to in paragraphs 1 and 2 extend to property derived from conduct that occurred on the territory of another Member State or of a third country, where that conduct would constitute a criminal activity had it occurred domestically.
4. In the case of point (c) of paragraph 3 of this Article, Member States may further require that the relevant conduct constitutes a criminal offence under the national law of the other Member State or of the third country where that conduct was committed, except where that conduct constitutes one of the offences referred to in points (a) to (e) and (h) of point (1) of Article 2 and as defined in the applicable Union law.
5. Member States shall take the necessary measures to ensure that the conduct referred to in points (a) and (b) of paragraph 1 is punishable as a criminal offence when committed by persons who committed, or were involved in, the criminal activity from which the property was derived.
Member States shall take the necessary measures to ensure that aiding and abetting, inciting and attempting an offence referred to in Article 3(1) and (5) is punishable as a criminal offence.
Penalties for natural persons
1. Member States shall take the necessary measures to ensure that the offences referred to in Articles 3 and 4 are punishable by effective, proportionate and dissuasive criminal penalties.
2. Member States shall take the necessary measures to ensure that the offences referred to in Article 3(1) and (5) are punishable by a maximum term of imprisonment of at least four years.
3. Member States shall also take the necessary measures to ensure that natural persons who have committed the offences referred to in Articles 3 and 4 are, where necessary, subject to additional sanctions or measures.
Article 6 6AMLD definitions
1. Member States shall take the necessary measures to ensure that, in relation to the offences referred to in Article 3(1) and (5) and Article 4, the following circumstances are to be regarded as aggravating circumstances:
the offence was committed within the framework of a criminal organisation within the meaning of Framework Decision 2008/841/JHA; or
the offender is an obliged entity within the meaning of Article 2 of Directive (EU) 2015/849 and has committed the offence in the exercise of their professional activities.
2. Member States may provide that, in relation to the offences referred to in Article 3(1) and (5) and Article 4, the following circumstances are to be regarded as aggravating circumstances:
the laundered property is of considerable value; or
the laundered property derives from one of the offences referred to in points (a) to (e) and (h) of point (1) of Article 2.
Article 7 6AMLD definitions
Liability of legal persons
1. Member States shall take the necessary measures to ensure that legal persons can be held liable for any of the offences referred to in Article 3(1) and (5) and Article 4 committed for their benefit by any person, acting either individually or as part of an organ of the legal person and having a leading position within the legal person, based on any of the following:
a power of representation of the legal person;
an authority to take decisions on behalf of the legal person; or
an authority to exercise control within the legal person.
2. Member States shall take the necessary measures to ensure that legal persons can be held liable where the lack of supervision or control by a person referred to in paragraph 1 of this Article has made possible the commission of any of the offences referred to in Article 3(1) and (5) and Article 4 for the benefit of that legal person by a person under its authority.
3. Liability of legal persons under paragraphs 1 and 2 of this Article shall not preclude criminal proceedings from being brought against natural persons who are perpetrators, inciters or accessories in any of the offences referred to in Article 3(1) and (5) and Article 4.
Article 8 6AMLD definitions
Sanctions for legal persons
Member States shall take the necessary measures to ensure that a legal person held liable pursuant to Article 7 is punishable by effective, proportionate and dissuasive sanctions, which shall include criminal or non-criminal fines and may include other sanctions, such as:
exclusion from entitlement to public benefits or aid;
temporary or permanent exclusion from access to public funding, including tender procedures, grants and concessions;
temporary or permanent disqualification from the practice of commercial activities;
placing under judicial supervision;
a judicial winding-up order;
temporary or permanent closure of establishments which have been used for committing the offence.
Article 9 6AMLD definitions
Member States shall take the necessary measures to ensure, as appropriate, that their competent authorities freeze or confiscate, in accordance with Directive 2014/42/EU, the proceeds derived from and instrumentalities used or intended to be used in the commission or contribution to the commission of the offences as referred to in this Directive.
1. Each Member State shall take the necessary measures to establish its jurisdiction over the offences referred to in Articles 3 and 4 where:
the offence is committed in whole or in part on its territory;
the offender is one of its nationals.
2. A Member State shall inform the Commission where it decides to extend its jurisdiction to offences referred to in Articles 3 and 4 which have been committed outside its territory where:
the offender is a habitual resident on its territory;
the offence is committed for the benefit of a legal person established on its territory.
3. Where an offence referred to in Articles 3 and 4 falls within the jurisdiction of more than one Member State and where any of the Member States concerned can validly prosecute on the basis of the same facts, the Member States concerned shall cooperate in order to decide which of them will prosecute the offender, with the aim of centralising proceedings in a single Member State.
Account shall be taken of the following factors:
the territory of the Member State on which the offence was committed;
the nationality or residency of the offender;
the country of origin of the victim or victims; and
the territory on which the offender was found.
The matter shall, where appropriate and in accordance with Article 12 of Framework Decision 2009/948/JHA, be referred to Eurojust.
Member States shall take the necessary measures to ensure that effective investigative tools, such as those used in combating organised crime or other serious crimes are available to the persons, units or services responsible for investigating or prosecuting the offences referred to in Article 3(1) and (5) and Article 4.
Replacement of certain provisions of Framework Decision 2001/500/JHA
Point (b) of Article 1 and Article 2 of Framework Decision 2001/500/JHA are replaced with regard to the Member States bound by this Directive, without prejudice to the obligations of those Member States with regard to the date for transposition of that Framework Decision into national law.
With regard to the Member States bound by this Directive, references to the provisions of Framework Decision 2001/500/JHA referred to in the first paragraph shall be construed as references to this Directive.
1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 3 December 2020. They shall immediately inform the Commission thereof.
When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States.
2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
The Commission shall, by 3 December 2022, submit a report to the European Parliament and to the Council, assessing the extent to which the Member States have taken the necessary measures to comply with this Directive.
The Commission shall, by 3 December 2023, submit a report to the European Parliament and to the Council assessing the added value of this Directive with regard to combating money laundering as well as its impact on fundamental rights and freedoms. On the basis of that report, the Commission shall, if necessary, present a legislative proposal to amend this Directive. The Commission shall take into account the information provided by Member States.
What does it all mean?
For a breakdown on what this could mean for your business or how you can train your employees to understand it, contact us.
This list provides AML operatives with a quick page to view each country’s own business registration portal. You can view them when researching a customer, transaction or trade.
However, at CYW we are collating this globally and providing an automated way to link trades and transactions to every single entry on every single business registration website, all translated into English.