The weaknesses in EU member states’ AML/CFT regimes and the sizeable gaps between the prevention and detection of money laundering and terrorism financing brought up the idea for a new Authority for AML/CFT (AMLA). The AMLA shall rule the supervisors’ worlds at an EU level from 2026 onwards. The Authority will be a newly created, decentralised agency of the European Union. The location remains to be selected.
Its objective is to prevent money laundering and the financing of terrorism in the Union by contributing to enhanced supervision and improved cooperation between FIUs and supervisory authorities.
1) Direct supervision of certain selected financial sector obliged entities
2) Indirect supervision of both financial-sector- and non-financial-sector-obliged entities through oversight of supervisors or self-regulatory bodies
3) A coordination and support mechanism for EU Financial Intelligence Units
Examples of obliged entities are credit, e-money and other financial institutions including further credit and payment service providers, investment firms, life insurance undertakings and intermediaries.
The AMLA will submit regulatory technical standards and take over the management of two existing infrastructures:
These two infrastructures are already financed by the EU.
The new AMLA will consist of 250 staff. The expenses calculated are about EUR 45.6 m per year, with 75% to be paid by the obliged entities of the member states. The total expenditure from the start in 2023 until 2027 is estimated to be approx. €73m. The remaining amount is financed by EU budgets. Full operations are set to start in 2026.
The AMLA will play a significant role in conducting joint FIU analyses, i.e., the identification of relevant cases and the development of appropriate methods for the joint analyses of cross-border cases. Furthermore, the AMLA makes IT & artificial intelligence services and tools for secure information sharing – including through hosting of FIU.net – available to FIUs. It shall promote expert knowledge on the detection, analysis, and methods of disseminating suspicious transactions, provide specialised training and assistance to FIUs, and prepare and coordinate threat assessments.
The AMLA may assume supervisory responsibility of an single, financial sector-obliged entity where there have been problems related to compliance with applicable requirements by the entity. ; the relevant supervisory authority has not taken adequate measures to address non-compliance in a timely manner, for example.
The Authority will have the power to address binding decisions to such selected obliged entities and to impose administrative sanctions on legal entities up to a maximum of 10% of their turnover or €10 million, whichever is higher.
It remains to be seen what additional tasks and what administrative burdens will be imposed on the obligated parties. In any case, further EU coordination of AML/CFT tasks makes sense and, in this respect, brings Member States under a common denominator in the long term.
We will keep you updated regarding the AMLA, the supervisors’ supervisor.
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