29 October, 2018
The Council of the European Union adopted tougher rules on money laundering following several high-profile scandals that have involved large banks. Most recently, Danske Bank’s €200bn money laundering case was cited as the “the biggest scandal” to occur in Europe. Earlier this year, Deutsche Bank AG was instructed by BaFin to take appropriate internal safeguards and comply with general due diligence obligations after its 2017 money laundering scheme moved $10 billion out of Russia between 2011 and 2015.
The new anti-money directive introduces new criminal law provisions which will aim to disrupt and block access by criminals to financial resources, including those used for terrorist activities.
The new rules include:
• establishing minimum rules on the definition of criminal offences and sanctions relating to money laundering. Money laundering activities will be punishable by a maximum term of imprisonment of 4 years, and judges may impose additional sanctions and measures (e.g. temporary or permanent exclusion from access to public funding, fines, etc.). Aggravating circumstances will apply to cases linked to criminal organisations or for offences conducted in the exercise of certain professional activities.
• the possibility of holding legal entities liable for certain money laundering activities which can face a range of sanctions (e.g. exclusion from public aid, placement under judicial supervision, judicial winding-up, etc.)
• removing obstacles to cross-border judicial and police cooperation by setting common provisions to improve investigations. For cross-border cases, the new rules clarify which member state has jurisdiction, and how those member states involved cooperate, as well as how to involve Eurojust.
In addition, the new rules also come with increased penalties:
• individuals convicted of money laundering face up to four years’ imprisonment
• Penalties for companies and other legal entities may include exclusion from public benefits or aid; exclusion from access to public funding, including tender procedures, grants, and concessions; disqualification from practicing commercial activities; judicial supervision; a judicial winding-up order; and closure of the establishments used to commit the offence.
Once the directive is published within the EU official journal, member states will have up to 24 months to transpose it into national law.
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