EU Court Rules Companies Can Be Directly Held Liable for Money Laundering Without Naming Individuals

The European Court of Justice (EuGH) issued a landmark ruling on January 29, 2026, enabling authorities across the European Union to impose sanctions on companies for money laundering violations without the need to identify a specific individual perpetrator. This decision directly challenges previous legal requirements in countries like Austria, where sanctions against corporations were contingent upon naming individuals responsible for misconduct.

The ruling is grounded in the EU’s Anti-Money Laundering Directive (2015/849), which mandates the application of effective, proportionate, and deterrent measures against legal entities engaging in money laundering. The court emphasized the principle of "effet utile," or practical effectiveness of EU law, ensuring that corporate entities can be held accountable even when individual identification within the organization is difficult. This approach builds on earlier case law, notably the "Deutsche Wohnen" decision (C-807/21), further reinforcing corporate liability.

Previously, Austria’s Federal Administrative Court required proof of an individual’s involvement before sanctioning a company, causing enforcement delays and limiting accountability. With the EuGH’s decision, this "person-first" condition is abolished, allowing companies to face penalties based on organizational failings or negligence by management. Austria’s existing statute of limitations—three years for prosecution and five years for criminal liability in money laundering cases—remains unchanged.

The ruling serves as a strong signal to companies to strengthen corporate governance, internal controls, and compliance systems to mitigate money laundering risks. Firms are also advised to conduct prompt internal investigations and maintain thorough documentation to meet regulatory expectations and avoid sanctions.

This development notably enhances the EU's ability to effectively enforce anti-money laundering laws, closing prior legal loopholes caused by the necessity to identify individuals. While individual accountability remains relevant, it no longer delays or impedes holding companies directly responsible.

According to the EuGH, "sanctions can be imposed directly on companies based on the actions or negligence of their management," highlighting that organizational accountability is crucial to combating money laundering within the EU’s jurisdiction. This decision marks a significant shift toward stricter corporate responsibility in the fight against financial crime.