The recent approval of Sixth European AML Directive places an important step towards the fight against money laundering and terrorist financing. The directive, ratified at first reading by the European Parliament in Strasbourg, comes at a time of fervent judicial discussion on access to the Register of beneficial owners in Italy and promises to redefine the standards of disclosure and control in the 27 countries of the European Union.
This new regulatory instrument brings with it a number of additional requirements for obliged businesses, including banks, in order to strengthen the fight against money laundering and terrorist financing.
Registers open and consultable
One of the salient elements of the Sixth Directive is its emphasis on maximum transparency in beneficial ownership registers, which will now be accessible not only to journalists and civil society organizations, but also to individuals and entities interested in dealing with legal entities. This openness is essential to encourage greater vigilance and prevent illicit activities.
Another innovation concerns the publication of registers relating to the super-rich, those who are attracted by national tax policies or “residence rights in exchange for investments”. Member States will have to carry out rigorous checks on the origin of applicants’ funds and assets, publishing detailed annual reports on the risks of money laundering and terrorist financing linked to these practices.
Also checks on properties
The directive also extends to the real estate sector, recognizing the crucial role of real estate in facilitating money laundering. Member States are now required to grant competent authorities direct access to land registers to enable effective and real-time monitoring of property transactions.
The issue of virtual IBANS
In addition, the Sixth Directive introduces new provisions regarding the registration and sharing of virtual IBANS, used to redirect payments to physical bank or payment accounts. These measures aim to counter the illicit use of virtual IBANS in money laundering and terrorist financing, ensuring greater traceability of cross-border financial transactions.
The central point of contact for crypto assets
Finally, to reduce vulnerabilities related to crypto-assets and financial service providers, Member States will have to establish a “central contact point”. This measure, inspired by the schemes adopted by the European Union with hi-tech multinationals, aims to improve cooperation and exchange of information between the competent authoritiesin order to prevent potential financial abuse.
More severe sanctions
Compared to the previous version of the directive, there has been a broadening of the scope of obligations and sanctions for companies managing financial transactions. In particular, requirements have been harmonized across EU countries, requiring cross-border cooperation and the possible prosecution of offenders within a single European jurisdiction.
A significant change is represented by theexpanded list of 22 predicate crimes, now including cybercrime for the first time. This means that companies operating in the FinTech environment must strengthen their customer identification and anti-money laundering measures to mitigate the risk of non-compliance.
The Sixth AML Directive also establishes a greater individual responsibility, allowing individual decision makers within organizations to be prosecuted for crimes such as aiding or abetting money laundering. Furthermore, all legal entities, including partnerships, will be held criminally liable for allowing illicit activities within their operations.
Penalties have been significantly increased, with one minimum four-year prison sentence for money laundering. Judicial powers to impose individual fines and restrict access to public finances have also been expanded to deter money launderers and their enablers.
