The European Union approaches AML/CTF through continuous legal updates called Anti-Money Laundering Directives (AMLD). Unlike US federal statutes, which take effect immediately across all states, EU Directives establish specific outcomes that each member state must implement through domestic law. This structure can lead to variations in enforcement across the EU.
Reconciling AMLD5 and AMLD6 Obligations
To build a compliant cross-border program, compliance officers must align their systems with both AMLD5 (2018) and AMLD6 (2020).
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|               AMLD5 (Structural Transparency)               |
| - Mandated public registries for Beneficial Ownership (UBO) |
| - Expanded regulatory perimeter to Virtual Asset Providers |
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|               AMLD6 (Enforcement & Liability)               |
| - Standardized 22 predicate offences across all EU states   |
| - Extended criminal liability to corporate legal entities  |
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1. Structural Transparency (AMLD5)
AMLD5 focused on improving corporate transparency and closing loopholes created by new technologies. It required member states to launch public registries tracking Ultimate Beneficial Ownership (UBO) to prevent bad actors from hiding behind complex shell companies. It also brought virtual asset service providers (VASPs) and electronic wallet providers under strict AML supervision.
2. Criminal Enforcement and Corporate Liability (AMLD6)
AMLD6 shifted focus from transparency to enforcement. It standardized the definition of money laundering across the EU by establishing 22 predicate offenses, including cybercrime and environmental crime. Crucially, AMLD6 extended criminal liability to legal persons (the corporations themselves). This means an institution can be prosecuted for money laundering failures if a lack of supervision by senior management allows an employee to facilitate financial crime.
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