The Sixth Anti-Money Laundering Directive (6AMLD) is a European Union directive that was adopted in 2018. The directive aims to strengthen the EU's anti-money laundering (AML) framework by requiring financial institutions and other businesses to take more stringent measures to prevent money laundering and terrorist financing.
6AMLD builds on the previous AML directives, 4AMLD and 5AMLD, and introduces a number of new requirements, including:
1: Extended scope of application: 6AMLD expands the scope of application of the AML framework to include a wider range of businesses, such as virtual currency exchange providers, trust and company service providers, and gaming operators.
2: Enhanced customer due diligence (CDD):
6AMLD requires businesses to conduct more thorough CDD procedures, including collecting information on the beneficial ownership of their customers.
3: Increased reporting requirements: 6AMLD requires businesses to report more suspicious transactions to the relevant financial intelligence unit.
4: Enhanced cooperation between authorities: 6AMLD strengthens the cooperation between financial intelligence units (FIUs) across the EU, making it easier to share information and investigate suspicious transactions.
6AMLD was transposed into national law by EU member states by June 3, 2021. Businesses that are subject to the 6AMLD requirements are required to comply with the new rules by that date.
The following are some of the key benefits of 6AMLD:
1: Increased transparency: 6AMLD will make it more difficult for criminals to launder money, as businesses will be required to collect more information about their customers.
2: Enhanced cooperation: 6AMLD will make it easier for FIUs to share information and investigate suspicious transactions, which will help to prevent money laundering and terrorist financing.
3: Reduced risk: 6AMLD will help to reduce the risk of businesses being fined or prosecuted for non-compliance with AML requirements.
The following are some of the key challenges of 6AMLD:
1: Compliance costs: The new requirements of 6AMLD will increase the compliance costs for businesses, as they will need to implement new CDD procedures and report more suspicious transactions.
2: Technology challenges: Businesses may face challenges in implementing the new CDD requirements, as they will need to collect and store more information about their customers.
3: Litigation risk: Businesses may face increased litigation risk, as they will be held more accountable for non-compliance with AML requirements.
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