Council of the EU ¦ Evaluation of Directive (EU) 2018/1673 on Combating Money Laundering by Criminal Law

EU evaluation points to progress, but also gaps

The European Commission’s 2026 evaluation of Directive (EU) 2018/1673 shows that the EU’s criminal law response to money laundering has become more consistent and more effective across much of the bloc. The Directive, adopted in 2018 and applicable to 25 Member States (Ireland and Denmark are not bound by it), was designed to harmonise core money laundering offences, widen the scope of criminal liability, and improve cooperation between national authorities. According to the report, it has largely achieved those aims.

The evaluation covers the period from 2018 to 2025 and finds that the Directive has helped authorities investigate and prosecute money laundering more effectively, while also supporting a more coordinated cross-border response. It has done so by creating common minimum rules on what counts as money laundering, what offences can serve as predicates, and which sanctions should apply to both natural and legal persons.

Stand-alone money laundering and self-laundering make a difference

One of the most important developments highlighted in the report is the introduction of stand-alone money laundering and self-laundering. These concepts have strengthened criminal enforcement because prosecutors no longer need, in every case, a conviction for the underlying predicate offence before pursuing money laundering charges. In practice, this can make proceedings faster and easier to manage.

The report says judicial and law enforcement authorities saw clear benefits from this approach. Removing the need to prove every element of the predicate offence has made prosecutions easier, while the recognition of self-laundering has expanded the reach of criminal law to cover those who generate the illicit funds in the first place and then try to conceal them.

The Commission also notes that these changes have increased the deterrent effect of the law. For financial crime practitioners, that is an important signal: the EU is continuing to push toward a system where laundering can be punished more effectively even when the underlying criminal conduct is difficult to prosecute in full.

Bastian Schwind-Wagner _Follow

"The Commission’s 2026 evaluation shows that Directive (EU) 2018/1673 has strengthened the EU’s criminal law response to money laundering by improving harmonisation, expanding prosecutorial tools, and supporting cross-border cooperation. The report also confirms that stand-alone money laundering and self-laundering have made enforcement more effective in practice.

At the same time, the evaluation highlights important gaps, including inconsistent transposition across Member States, uncertainty around the definition of property, and uneven approaches to jurisdiction and penalties. The Commission therefore calls for clearer rules, better alignment with newer EU criminal law instruments, and continued monitoring of how the Directive works in practice."

Better tools for investigators

The Directive has also improved investigative capability. Stakeholders reported that money laundering investigations now benefit from the same investigative techniques used in organised crime cases, including access to specialised tools such as communication interception. This matters because money laundering cases often depend on tracing complex financial flows rather than relying on a single overt act .

The report links this to broader efforts to follow the financial trail and gather stronger evidence against organised crime groups. By extending the range of tools available to investigators, the Directive supports the wider EU objective of dismantling criminal networks by targeting their profits.

Cross-border cooperation has improved, but not enough

Another positive finding is that the Directive has helped create a more coherent legal language across Member States. That has made it easier for national authorities to cooperate across borders, especially where money laundering cases involve multiple jurisdictions. The Commission says harmonised offences and penalties make it easier for authorities to recognise and work with one another’s legal frameworks.

At the same time, the evaluation shows that cross-border effectiveness is still limited by differences in how Member States transpose and apply the rules. In particular, stand-alone money laundering is not interpreted uniformly. In some jurisdictions, authorities only need to establish some prior criminal activity; in others, they must identify the predicate offence much more precisely, sometimes including the place and time of the underlying crime. That variation creates legal uncertainty and weakens the practical value of the harmonised framework.

A major gap around the meaning of “property”

The report also identifies a significant problem with the definition of “property” that can be laundered. While the Directive was intended to cover a broad range of illicit gains, some Member States do not treat tax savings as property in the same way as positive gains. As a result, they exclude from money laundering offences funds that were never paid out but were instead illegally retained, such as unpaid VAT.

That is a serious issue in light of the scale of VAT fraud in the EU. The Commission points to Europol and the European Public Prosecutor’s Office (EPPO), both of which have highlighted the enormous financial damage caused by this type of fraud. If money saved through tax crime cannot be clearly covered by money laundering offences, a key channel for criminal profit remains only partially addressed.

Jurisdiction and double criminality still create friction

The evaluation also notes divergent approaches to jurisdiction, especially in cases where the offender is a national of the prosecuting Member State. One recurring issue is the requirement of double criminality, which means jurisdiction can depend on whether the conduct was also criminal in the state where it occurred. That can complicate prosecutions and weaken the ability of authorities to act efficiently in cross-border cases.

This is another example of how, despite EU-level harmonisation, national differences still shape how effective the law is in practice.

Efficiency appears positive, but full data are still missing

On efficiency, the Commission is cautious. It says a full cost-benefit assessment is not yet possible because criminal proceedings in money laundering cases can take years. As a result, the real impact of the Directive in terms of prosecutions, convictions, and confiscated assets will only become fully visible later.

Still, the early picture is broadly positive. Most Member States reported zero or minimal implementation costs, which makes sense given that the Directive mainly required changes to criminal law and criminal procedure codes. The main additional burden appears to be training for judicial and law enforcement authorities (LEAs). Against that, the Directive seems to have given authorities better tools and wider reach, which points to a reasonable overall balance.

Coherence is good internally, but external alignment needs work

Internally, the Directive appears to work well. The Commission found no major contradictions between its provisions.

Externally, however, there are some gaps. The report says the Directive is not fully aligned with the Council of Europe Warsaw Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism. The EU signed that convention in 2009 but has not yet ratified it. The Commission suggests this issue could be addressed when it moves forward with a proposal for Council approval of ratification.

The Directive is also broadly consistent with newer EU criminal law instruments, including the EU’s reinforced anti-money laundering framework and the new asset recovery and confiscation rules. But the report notes that the Directive is less detailed than more recent legislation when it comes to additional penalties for natural persons and sanctions for legal persons.

Fundamental rights concerns remain limited, but not absent

The Commission concludes that the Directive is generally in line with fundamental rights standards, including the Charter of Fundamental Rights of the European Union. Most authorities and institutions consulted did not report problems.

Even so, some stakeholders, especially NGOs, think tanks, and academics, raised concerns about the presumption of innocence in stand-alone money laundering cases, possible double punishment in self-laundering situations, and the clarity and proportionality of penalties. These are not treated as decisive objections in the report, but they are important warning signs.

The Commission’s overall view is that fundamental rights are protected through the broader framework of EU procedural rights, the Charter, the European Convention on Human Rights, and national court review. That said, the report suggests continued monitoring is necessary.

What the Commission says should happen next

The lesson of the evaluation is not that the Directive has failed. On the contrary, the Commission considers it largely successful. But it also sees clear room for improvement.

The report points to the need for more clarity on stand-alone money laundering so that authorities are not forced to prove too much of the predicate offence. It also recommends aligning penalties and sanctions more closely with newer EU criminal law instruments, including clearer rules on additional penalties for natural persons and more structured sanctions for legal persons.

Another recommendation is to refine the definition of property so that it more clearly covers all forms of illicit gain, including tax-related savings and indirect proceeds. The Commission also wants better alignment with the Warsaw Convention and continued monitoring of the Directive’s effects in the years ahead.

A continuing shift toward follow-the-money enforcement

The EU continues to strengthen its follow-the-money strategy against organised crime. Money laundering is still one of the main ways criminal groups turn illicit activity into usable profit, and the Commission sees criminal law as a crucial part of the response.

The Directive has helped create a more common EU approach, but the evaluation shows that harmonisation is still incomplete. Differences in national transposition, uncertainty around stand-alone money laundering, and gaps in the definition of property all limit the Directive’s full impact.

For financial crime professionals, the takeaway is that the EU framework is moving in the right direction, but enforcement remains uneven. The next phase will likely focus on tightening the rules, improving consistency, and making sure the law keeps pace with the increasingly complex ways in which criminal proceeds are concealed, moved, and reused.

Dive deeper

• EUR-Lex ¦ COMMISSION STAFF WORKING DOCUMENT EVALUATION Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law ¦ Link
• EUR-Lex ¦ Charter of Fundamental Rights of the European Union ¦ Link
• Wikipedia® ¦ 2005 Warsaw Convention ¦ Link