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Europe's new AML Authority (AMLA) is expected to obtain full legal status by the end of the year.

By the end of this year, officials anticipate that Europe's new AML Authority (AMLA) will have established its legal status.

It has been learned that the European Parliament is getting ready to hold a full plenary session on the authority at the end of April or the beginning of May.

This will follow the work of the parliament's rapporteurs, who are now outlining how they believe AMLA should function and who will report by the end of the next month. The parliament's plenary session before the summer will then conduct a full vote.

The majority of the Commission's recommendations on how AMLA should operate were accepted by EU states at the European Council last June, including the imposition of a €10,000 limit on cash transfers across the Union. The Commission's planners considered this a major success because some Member States had pushed for the threshold to be lowered to €5,000.

The agency's headquarters must be chosen, and Germany, France, Italy, Spain, Austria, and Lithuania are among those that have expressed interest. The Netherlands withdrew from the competition, citing the expense of political lobbying as its justification.

The Council and the Parliament are receiving assistance from an AMLA Task Force inside the DG FISMA financial services division of the European Commission regarding what would be needed in the host city.

The European Parliament had sought such precise standards for choosing the host city in order to ensure objectivity. According to the 2012 Common Approach on Decentralized Agencies, it is up to the Member States to decide where it will be located. As a result, be prepared for a lot of horse trading.

The facility "should be operational in its seat location by the beginning of 2024," according to a report to the parliament last month. The speed of this will be determined by Spain's second-half president of the Council and the current Swedish presidency for the first half of the year. That will be intriguing because Spain is also vying to host AMLA in Madrid!

Depending on the objectives and functions, the agency will be supported through bank fees and a contribution from the Union budget.

For the accomplishment of its objectives and implementation, the authority will be accountable to both the European Parliament and the Council. Every year, the AMLA Chair will deliver a report to the Parliament, the Council, and the Commission.

The parliament is once again the center of interest. The idea is being looked at jointly by the Civil Liberties, Justice and Home Affairs (LIBE) and Economic and Monetary Affairs (ECON) committees.

Two MEPs who are the rapporteurs and are expected to submit their reports at the end of next month are helping them: Emil Radev (EPP, Bulgaria) and Eva Maria Poptcheva (Renew, Spain). By the end of April, the entire parliament will vote on it.

This is vital since the parliament must decide before the elections for the European Parliament held in 2024; hence, the vote must practically be held before summer.

The parliament, Commission, and European Council will next engage in "trilogue" negotiations that, if everything goes well, will grant AMLA full legal status by the end of the year.

The rapporteurs urged the inclusion of crypto-asset service providers in the scope of direct AMLA oversight in their initial report.

Governments supported this, which brings the total number of chosen required entities that must be under direct supervision up to 40–45. By virtue of this decision alone, AMLA will have to double its projected personnel from 250 to 500 and its initial budget from €200 million to €400 million.

The rapporteurs also want a standardized methodology for information exchange so that AMLA can have the data it needs to conduct risk assessments.

Additionally, they suggested providing the authority the competence to make supervisory judgments that are specifically applicable to the institution in question and to act as a legally-binding mediator in the event of a dispute between national competent authorities.

The European Council last summer decided that EU governments should: 

- amend the eligibility and qualifying criteria to widen the scope of the AMLA’s direct supervision

- this would cover the riskiest credit institutions, financial institutions and groups thereof, including crypto asset service providers meeting the selection criteria

- For the first selection process, the AMLA should assume direct supervision of the 40 obliged entities or groups operating in the greatest number of Member States, either through establishments or active free provision of services, if more than 40 obliged entities are selected in accordance with the amended criteria.

- AMLA would have the authority to compel actions to improve obliged entities' compliance with the AML/CFT framework, such as strengthening internal procedures (e.g., implementing specific procedures for clients who have been identified as high-risk) and alterations to the governance structure, including the dismissal of management staff).

Governments defined the objective requirements that would initiate joint assessments and indicated that such analyses should be carried out largely by national FIU employees through the FIU support and coordination system.


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