AMLA: new player in fight against money laundering and terrorist financing
The European Union is stepping up its fight against money laundering and terrorist financing. Last year, the new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) was created. Based in Frankfurt am Main, it will play a key role in countering financial crime across EU member states.
By establishing the AMLA, the European Union is responding to the identified weaknesses in the effectiveness of supervision in the field of anti-money laundering, mainly due to cross-border entities. In fact, cooperation between the national supervisory authorities has proven to be insufficient.
What is the role of AMLA?
The AMLA will be the central watchdog authority for both the financial and non-financial sectors. It will directly exercise supervision over financial institutions, i.e., selected obliged persons, while it will supervise non-financial institutions, i.e., non-selected obliged entities, only indirectly.
The AMLA will also provide coordination and methodological support to the national supervisory authorities that will continue to supervise lower-risk entities. Similar to banking supervision authorities, the AMLA will issue guidelines, recommendations, and regulatory and implementing technical standards.
Who will be affected?
At this time, no information is available as to which entities the AMLA will oversee as selected obliged persons. These would likely be credit and financial institutions and groups of credit and financial institutions operating in several member states that will be assessed as high-risk. The AMLA will select these obliged persons in 2027, and it is already envisaged that there will be up to 40 of them.
As for non-selected obliged persons, the AMLA may, under certain conditions, instruct national supervisory authorities to conduct investigations or consider imposing sanctions. In certain cases, the AMLA may even take over the supervision over non-selected obliged persons.
Beginning when?
The regulation establishing the AMLA is already in force and will be applicable from 1 July 2025.Currently, staff and IT infrastructure are being secured, and the authority is expected to be fully operational by 2028.
The establishment of the AMLA will make the regulatory environment for anti-money laundering more stringent. Selected institutions will have to prepare for the new supervisory authority and possible changes in controls. Other entities may need to adjust their systems to comply with the new AMLA regulatory requirements.