Money Laundering Definitions Included in the EU Fourth Directive

Expanded Definition of Money Laundering

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Question

Which three definitions of money laundering are included in the expanded definition of the European Union Fourth Directive? (Choose three.)

Answers

A. The creation of shell companies to disguise the identity of its owners

B. The conversion or transfer of property with knowledge that it is derived from criminal activity

C. The acquisition or use of property knowing, when it was received, that it was derived from criminal activity

D. The transfer of cash in excess of 15,000 euros across country borders regardless of whatever the cash was derived from criminal activity

E. Concealing or disguising the nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that the property is derived from criminal activity

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Explanations

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A. B. C. D. E.

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The European Union Fourth Anti-Money Laundering Directive (AMLD IV) is an EU directive that came into force on June 26, 2017, aimed at preventing the use of the financial system for money laundering and terrorist financing.

The directive provides an expanded definition of money laundering that covers a range of activities designed to conceal the true source, nature, location, disposition, movement, or ownership of funds derived from criminal activity.

The three definitions of money laundering that are included in the expanded definition of AMLD IV are as follows:

A. The creation of shell companies to disguise the identity of its owners: This involves the creation of companies or other legal entities that are used to conceal the true owners of funds or assets. Such entities may be used to move funds or assets between jurisdictions, making it difficult for law enforcement agencies to trace the true source of the funds or assets.

B. The conversion or transfer of property with knowledge that it is derived from criminal activity: This involves the conversion of funds or assets derived from criminal activity into other forms, such as investments or other assets, or the transfer of such funds or assets to other jurisdictions to avoid detection.

C. The acquisition or use of property knowing, when it was received, that it was derived from criminal activity: This involves the acquisition or use of funds or assets that are known to be derived from criminal activity, such as the proceeds of drug trafficking, corruption, or other crimes.

The other options, D and E, are not included in the expanded definition of AMLD IV. Option D is related to the requirement to report cross-border movements of cash in excess of 15,000 euros, which is a separate provision of the directive. Option E, on the other hand, is a general definition of money laundering that is not specific to AMLD IV.

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