A critical analysis of the fifth EU anti-money laundering directive

Abstract

Money laundering is the process by which criminals seek to distance criminal proceeds from their source, and in doing so, legitimise those proceeds. The European Union has had an anti-money laundering directive (AMLD) in place since 1991, however, the crime of money laundering is constantly evolving through various sectors, and consequently, the directives need constant amendments to tackle the crime at its current state. Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, more commonly referred to as the 5th EU anti-money laundering directive attempts to address the shortcomings of the 4th EU anti-money laundering directive. This study sheds light on the flaws which were brough about by the amendments introduced by the 5th EU AMLD. This research project will first briefly explore the deficiencies of the 4th AMLD as well as the catalysts of 5th AMLD. The study will then focus on an in-depth critical analysis of the main changes brought about by the 5th AMLD. Subsequent to this, since the Directive is a minimum harmonisation directive, focus will be placed on its effectiveness in implementation. The study will close off by a brief analysis of the latest EU AMLD, which is Directive (EU) 2018/1673, more commonly known as the 6th EU anti-money laundering directive. Following an in-depth analysis of the changes brought about by AMLD5, its implementation and a brief insight into the 6th AMLD, the study will close off by suggesting the best way forward to successfully tackle the crime of money laundering at Union level.