When does 6AMLD come into force?
AMLD 6 must be transposed today December 3rd 2020. AMLD6 replaces AMLD5 [1].
Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with 6AMLD by 3 December 2020.
What are the key takeaways?
First, the AMLD6 provides a clear definition of money laundering offences by detailing 22 [2] offences and reminds member states of taking appropriate and clear sanctions .
Important notes and changes are also about the criminal liability that has been expanded to legal persons, including companies and partnerships [3].
Finally, AMLD6 strengthens the fact that increase of member states have to increase cooperation regarding money laundering combat. Besides, Member States shall ensure that their competent authorities freeze or confiscate the proceeds derived from and instrumentalities used or intended to be used in the offences.
Are virtual assets under the scope of this new law?
Of course they are. Some of the impacts regarding cryptocurrencies can be the following:
1. Criminal LiabilityCompliance officers and Financial Intelligence should make sure that they take all necessary steps to optimize their compliance and AML & CTF policies. It also means that now it is clear that legal persons (e.g. CEO, CCO, etc.) are responsible in case of fraud, money laundering or terrorism financing. That is why crypto businesses should have proper internal controls and tools to implement a AML risk-based approach (KYC and transaction monitoring/screening as first steps).
2. Offences Sanctions
By defining offences and stricter sanctions, the EU shows how now it is important for member states to pay even more attention on virtual assets transactions.
3. Virtual Asset risk assessment reinforcementThe law says: “The use of virtual currencies presents new risks and challenges from the perspective of combating money laundering. Member States should ensure that those risks are addressed appropriately. Due to the impact of money laundering offences committed by public office holders on the public sphere and on the integrity of public institutions, Member States should be able to consider including more severe penalties for public office holders in their national frameworks in accordance with their legal traditions”
With no doubts, the EU's top priority is to combat money laundering and terrorism financing. This signal forces all member states to closely monitor digital assets transactions to report suspicious ones and to make sure to exchange data and information. This impacts the level of compliance to all relevant financial institutions and VASPs need to maintain a proper risk-based approach and internal controls and have tools and clear documentation of actions to exchange data when necessary.
How can Scorechain crypto risk AML solution help?
6AMLD emphasized that the use of virtual currencies presents new risks and challenges from the perspective of combating ML, therefore Member States should ensure that those risks are addressed appropriately. They shall also take the necessary measures to ensure that effective investigative tools are available for investigating or prosecuting the offences.
About Scorechain
As the European leader in crypto transaction monitoring and surveillance tools since 2015, Scorechain provides a powerful crypto risk AML solution and trusted by more than 100 customers in 29 countries, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms and some LEAs.
Scorechain’s full customizable risk-AML scoring system, its wide range of risk indicators, real-time alerts, comprehensive reporting system, and Entity Directory with Risk-AML due diligence performed on 700+ VASPs: all these features allow compliance teams to apply the risk-based approach required by the international standards to mitigate risks relating to money laundering and terrorist financing.
Want to try out this effective solution to have a better risk control while dealing with virtual currencies? Contact us for a free demo: contact@scorechain.com
References:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018L1673&from=EN
1.This Directive follows 5AMLD (Directive (EU) 2018/843), which was implemented in January 2020. Review our previous article about “5 things to do for cryptocurrency businesses to be AMLD5 Compliant”: https://blog.scorechain.com/5-things-to-do-for-cryptocurrency-businesses-to-be-amld5-compliant/ ↩
2. (a) participation in an organised criminal group and racketeering, (b) terrorism (c) trafficking in human beings and migrant smuggling (d) sexual exploitation (e) illicit trafficking in narcotic drugs and psychotropic substances (f) illicit arms trafficking; (g) illicit trafficking in stolen goods and other goods; (h) corruption (i) fraud (j) counterfeiting of currency (k) counterfeiting and piracy of products; (l) environmental crime (m) murder, grievous bodily injury; (n) kidnapping, illegal restraint and hostage-taking; (o) robbery or theft; (p) smuggling; (q) tax crimes relating to direct and indirect taxes, as laid down in national law; (r) extortion; (s) forgery; (t) piracy; (u) insider trading and market manipulation (v) cybercrime ↩
3. (a) a power of representation of the legal person; (b) an authority to take decisions on behalf of the legal person; or (c) an authority to exercise control within the legal person.↩
