Explanation
The following were the key features of the Second Directive:
* It extended the scope of the First Directive beyond drug-related crimes. The definition of "criminal activity" was expanded to cover not just drug trafficking, but all serious crimes, including corruption and fraud against the financial interests of the European community.
* It explicitly brought bureaux de change and money remittance offices under AML coverage.
* It clarified that knowledge of criminal conduct can be inferred from objective factual circumstances.

Explanation/Reference: https://egmontgroup.org/en/content/membership

Predicate offenses are the criminal activities that generate the proceeds that are later laundered through money laundering schemes. A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer from increased organized crime and corruption, as criminals would have more opportunities and incentives to engage in illicit activities and evade detection and punishment. Organized crime and corruption can have serious social and economic consequences for a country, such as undermining the rule of law, eroding public trust, threatening national security, harming human rights, reducing economic growth, and distorting market competition123.
References:
CAMS Certification Package - 6th Edition | ACAMS
Understanding Predicate Offences: The Hidden Web of Money Laundering
Predicate Offenses In Money Laundering - Financial Crime Academy
AML Terms Easily Confused: Predicate Offense vs. Money Laundering