The Timeline of Anti-Money Laundering (AML) Directives in Europe 

How Did the AMLD Evolve in Europe?  

The first AMLD in Europe was established in June 1991, two years before the birth of the EU. The ‘1AMLD’ focused on banks in the private sector, dubbed ‘credit and financial institutions (FIs).’ The 1AMLD required member states to impose legislation to oblige the FIs to adapt CDD and KYC procedures, including keeping customer records for up to five years. 1AMLD also required monitoring clients’ activity and sending ‘suspicious activity reports’ to national authorities. Unfortunately, it became apparent in time that the focus on banks would not be enough to block the growing money laundering activities. 

2AMLD, introduced in December 2001, aimed to fill the gaps of 1AMLD by broadening and defining the range of money laundering activities and underlining the importance of reporting suspicious activities to the national ‘Financial Intelligence Unit’ (FUI) in the member countries. 2AMLD did not only target banks, as money laundering involved other institutions and professions. For instance, Money Service Bureaus (MSBs) and designated non-financial businesses and professions (DNFBPs) were added under monitoring. Even lawyers’ right to professional secrecy was removed as a protection.  

3AMLD, introduced in 2005, targeted issues around the financing of terrorism and expanded the AML obligations to additional sectors and professions, including accountants and casinos. 3AMLD also introduced the risk-based approach (RBA) to AML procedures, enhancing CDD to enhanced due diligence (EDD) measures, allowing more inspection into a suspicious individual’s sources, wealth, and income.  

4AMLD, introduced in 2015, required all EU Member States to issue legislation demanding local FUIs and other obliged institutions to have access to the central register (digital repository storing information beneficial ownership for companies). 4AMLD also improved the coordination between FUIs and built a coordinated European policy to deal with anti-money threats from third countries.  

5AMLD came into effect in 2020 and revised the requirements of the previous directive. It holds banks responsible for reporting irregularities between the information on public registers and beneficial ownerships, which are gathered through CDD.  

6AMLD, the latest directive imposed in December 2020, has redefined money laundering, adding cybercrime to the list of predicate offences for the first time. To clarify the legality of money laundering and solidify the definitions of offences, 6AMLD established three points to spot aggression: criminal activity, acquisition of property through crime, and property laundering.