AMLA Assumes Full EU Anti-Money Laundering Mandate in Landmark Regulatory Shift

On 1 January 2026, the European Union reached a decisive moment in its campaign against financial crime as the European Banking Authority formally completed the transfer of all anti-money laundering and countering the financing of terrorism responsibilities to the Authority for Anti-Money Laundering and Countering the Financing of Terrorism. The handover represents a major step toward centralizing oversight at the EU level and safeguarding the integrity of the single market. It brings to a close a transition process that unfolded over several years, beginning in 2020 when the European Banking Authority was first entrusted with a dedicated mandate to coordinate AML and CFT supervision among member states. By relocating these powers to a specialized agency headquartered in Frankfurt, the EU seeks to remedy long-standing weaknesses in oversight and overcome fragmented enforcement approaches that have hindered effective action against illicit finance.

With the legal transfer now complete, the European Anti-Money Laundering Authority emerges as the cornerstone of a newly integrated supervisory framework. The agency has been assigned direct supervisory responsibility for 40 of the EU’s most complex and high-risk financial institutions, many of which conduct extensive cross-border operations. These entities have historically posed particular challenges for national authorities, given their exposure to sophisticated money laundering and terrorist financing schemes that can span multiple jurisdictions. The transition also encompassed the transfer of key supervisory tools, most notably the EuReCa database, which functions as a centralized system for reporting significant deficiencies in the internal controls of financial firms. By bringing this data together under one authority, AMLA is positioned to detect emerging risks and recurring vulnerabilities across the European financial system with greater precision and speed than was previously possible.

A central aim of this institutional overhaul is to finalize the long-sought single rulebook for anti-money laundering and countering the financing of terrorism. In the past, variations in how EU directives were implemented at the national level created regulatory inconsistencies that criminal networks could exploit by channeling funds through jurisdictions with weaker requirements. Under the new framework, AMLA will address these gaps by issuing binding technical standards and guidelines that apply uniformly to all obliged entities throughout the Union. This harmonization is expected to significantly elevate compliance expectations, particularly in critical areas such as customer due diligence, transparency of beneficial ownership, and the detection and reporting of suspicious transactions. In parallel, the authority will serve as a hub for cooperation among national financial intelligence units, promoting faster and more effective information sharing to dismantle cross-border money laundering operations.

To ensure continuity and avoid disruption during the handover, the European Banking Authority and AMLA have put in place a formal memorandum of understanding. This arrangement enables ongoing information exchange and guarantees that existing guidelines remain applicable until they are replaced by new standards issued by the incoming authority. While AMLA concentrates on dedicated financial crime supervision, the European Banking Authority will continue to address money laundering risks from a prudential standpoint. This complementary division of labor is intended to protect the soundness of banks and other institutions from the consequences of financial crime, including substantial regulatory penalties or the loss of correspondent banking relationships. Together, the two bodies aim to present a coordinated and resilient response to illicit financial flows, supported by clear supervisory responsibilities.

Looking ahead, the completion of this transfer signals a shift toward more proactive and data-driven enforcement across the European Union. As AMLA expands its operational capacity, financial institutions can expect more frequent supervisory engagements and deeper scrutiny of their governance, risk management, and internal control arrangements. Oversight is also likely to extend beyond traditional banks to encompass other high-risk segments, such as crypto-asset service providers and non-bank financial intermediaries. By combining advanced analytical tools with the collective expertise of national supervisors, the new authority intends to turn the EU from a patchwork of individual markets into a unified and formidable force against global money laundering. This structural transformation underscores the Union’s long-term commitment to protecting its economic interests and reinforcing public confidence in the strength and credibility of its financial system.

By fLEXI tEAM