To Know Money Laundering, You Need To Know Your Predicate Offences (& 6AMLD)

The EU's Sixth Money Laundering Directive (6AMLD) will close certain loopholes in member-states' domestic legislation by harmonising the definition of money laundering across the bloc. 6AMLD places a particular focus on 'predicate offences': when it is introduced on 3 June 2021, 6AMLD will expand its list of money laundering predicate offences to reflect the modern threat landscape better.

To prepare for the Directive's implementation, institutions should make themselves familiar with the changes it introduces.

What are Predicate Offenses?

• A predicate offence – or predicate crime – refers to a crime which is a component of a larger crime.
• In a financial context, the predicate crime would be any crime that generates monetary proceeds. The larger crime would be money laundering or financing of terrorism.

6AMLD: Expands Predicate Offenses

• 6AMLD will replace 5AMLD and be transposed into law across all member-states on 3 December 2020 – and must be implemented in those territories by 3 June 2021.

In more detail, 6AMLD defines and expands the list of crimes that qualify as money laundering predicate offences:

• 6AMLD defines and standardises 22 predicate offences for money laundering in all EU member states.

• The expanded list of 6AMLD predicate offences now includes cybercrime and environmental crime. 6AMLD also harmonises the definition of other predicate offences, including:

• Human trafficking/smuggling
• Murder and GBH
• Tax crime
• Insider trading

Under 6AMLD, aiding and abetting money laundering, and self-laundering  now also constitute criminal acts.

The 6th AML directive "Criminal activity" sets out in Directive 2014/57/EU of the European Parliament and of the Council, the following definitions 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, including any offence set out in Framework Decision 2008/841/JHA;

(b) terrorism, including any offence set out in Directive (EU) 2017/541 of the European Parliament and of the Council (9);

(c) trafficking in human beings and migrant smuggling, including any offence set out in Directive 2011/36/EU of the European Parliament and of the Council (10) and Council Framework Decision 2002/946/JHA (11);

(d) sexual exploitation, including any offence set out in Directive 2011/93/EU of the European Parliament and of the Council (12);

(e) illicit trafficking in narcotic drugs and psychotropic substances, including any offence set out in Council Framework Decision 2004/757/JHA (13);

(f) illicit arms trafficking;

(g) illicit trafficking in stolen goods and other goods;

(h) corruption, including any offence set out in the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (14) and in Council Framework Decision 2003/568/JHA (15);

(i) fraud, including any offence set out in Council Framework Decision 2001/413/JHA (16);

(j) counterfeiting of currency, including any offence set out in Directive 2014/62/EU of the European Parliament and of the Council (17);

(k) counterfeiting and piracy of products;

(l) environmental crime, including any offence set out in Directive 2008/99/EC of the European Parliament and of the Council (18) or in Directive 2009/123/EC of the European Parliament and of the Council (19);

(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, including any offence set out in Directive 2014/57/EU of the European Parliament and of the Council (20);

(v) cybercrime, including any offence set out in Directive 2013/40/EU of the European Parliament and of the Council (21).