Strasbourg/Brussels, 13 December 2023
EU Parliament information:
EP and Council teams have found an agreement on a European Anti-Money Laundering Authority (AMLA) to ensure effective enforcement of the EU’s rules on fighting money laundering.
Negotiating teams of the European Parliament and the Council of the EU have reached a political agreement on establishing an Anti-Money Laundering Authority (AMLA). The agreement does not include the seat of the future agency, on which discussions will continue.
As part of a larger package on combating money-laundering and terrorist financing, AMLA would supervise the EU’s new rulebook on combatting dirty money flows. It would be charged with directly supervising the most risky financial entities – those with operations in at least 6 member states – and in any event, supervising one per member state. It will also have strong powers to step in in case of supervisory failures and take over supervisory tasks.
Additionally, AMLA would also act as a central hub helping coordinate the actions of supervisors in different EU countries and ensuring convergence of supervisory practices. Based on a proposal from the Parliament, AMLA will also be tasked with mediating and settling disputes between national authorities.
Furthermore, AMLA would support financial intelligence units in analysing suspicious transactions and detecting money laundering cases, notably by supporting joint analysis and managing FIU.Net, the IT system used for Financial Intelligence Unit (FIU) information sharing.
Harmonised rules and application
Given the connections between AMLA, the enforcer, and the rules it will enforce, the co-legislators also reached a provisional agreement on elements of the wider money-laundering package.
Negotiators agreed on several horizontal points that would harmonise anti-money laundering and anti-terrorist financing rules and help member states to apply them in a more uniform/consistent way. New provisions include creation of reporting channels for receiving and handling information on breaches and protection of whistle-blowers, as well as effective cooperation between national FIUs and AMLA. Finally, the Parliament inserted new rules against circumvention of targeted financial sanctions and AMLA’s supervisory role in ensuring implementation by obliged entities of targeted financial sanctions.
The agency’s seat to be selected in 2024
For the first time, the host city for the new agency will be agreed between the Parliament and Council in the ordinary legislative procedure, following a Court of Justice of the European Union ruling to that effect. The co-legislators intend to host hearings with the candidates that have expressed their interest. Negotiations to agree on the seat selection procedure will continue.
Quotes
Co-rapporteur Eva Maria Poptcheva (Renew, Spain) said:
“We have a deal on the substantive provisions of the new Anti-money Laundering Authority. AMLA will be a game changer to crack down on dirty money in the EU. It will supervise the 40 riskiest financial entities and it will oversee the non-financial sector to prevent cases like the Pandora Papers. AMLA will also play a crucial role avoiding the circumvention of targeted financial sanctions like the ones included in the 11 sanctions packages approved by the EU against Russia. Next step is to find the best possible location to host AMLA.”
Co-rapporteur Emil Radev (EPP, Bulgaria) said: “The EP gave AMLA an important and strong role in the fight against money laundering. We hope that it will guarantee more financial security and better cooperation with national supervisors and FIUs in a cross-border environment, where risks have been growing at a constant pace. For the first time, AMLA will supervise directly the riskiest companies in the financial sector, as well as cryptocurrency providers that operate in several Member States.”
Further information
EU Council information:
Today, the Council and the Parliament reached a provisional agreement on creating a new European authority for countering money laundering and financing of terrorism (AMLA) – the centrepiece of the anti-money laundering package, which aims to protect EU citizens and the EU’s financial system against money laundering and terrorist financing.
AMLA will have direct and indirect supervisory powers over high-risk obliged entities in the financial sector. This agreement leaves out a decision on the location of the agency’s seat, a matter that continues to be discussed on a separate track.
Given the cross-border nature of financial crime, the new authority will boost the efficiency of the anti-money laundering and countering the financing of terrorism (AML/CFT) framework, by creating an integrated mechanism with national supervisors to ensure obliged entities comply with AML/CFT-related obligations in the financial sector. AMLA will also have a supporting role with respect to non-financial sectors, and coordinate financial intelligence units in member states.
In addition to supervisory powers and in order to ensure compliance, in cases of serious, systematic or repeated breaches of directly applicable requirements, the Authority will impose pecuniary sanctions on the selected obliged entities.
Supervisory powers
The provisional agreement adds powers to AMLA to directly supervise certain types of credit and financial institutions, including crypto asset service providers, if they are considered high-risk or operate across borders.
AMLA will carry out a selection of credit and financial institutions that represent a high risk in several member states. The selected obliged entities will be supervised by joint supervisory teams led by AMLA that will among other things carry out assessments and inspections. The agreement entrusts the authority to supervise up to 40 groups and entities in the first selection process.
For non-selected obliged entities, AML/CFT supervision would remain primarily at national level.
For the non-financial sector, AMLA will have a supporting role, carrying out reviews and investigating possible breaches in the application of the AML/CFT framework. AMLA will have the power to issue non-binding recommendations. National supervisors will be able to voluntarily set up a college for a non-financial entity operating across borders if deemed needed.
The provisional agreement expands the scope and content of AMLA’s supervisory database by asking the Authority to establish and keep up-to-date a central database of information relevant for the AML/CFT supervisory system.
Targeted financial sanctions
The Authority will monitor that selected obliged entities have internal policies and procedures in place to ensure the implementation of targeted financial sanctions asset freezes and confiscations.
Governance
AMLA will have a general board composed of representatives of supervisors an Financial Intelligence Units from all member states, and an executive board, that would be the governing body of the AMLA, composed of the chair of the Authority and five independent full-time members.
The Council and the Parliament removed the Commission’s veto right on some of the powers of the executive board, notably its budgetary powers.
Whistleblowing
The provisional agreement introduces a reinforced whistle-blowing mechanism. Regarding obliged entities, AMLA will only deal with reports coming from the financial sector. It will also be able to attend reports from employees of national authorities.
Disagreements
AMLA will be given the power to settle disagreements with a binding effect in the context of financial sector colleges and, in any other case, upon the request of a financial supervisor.
AMLA seat
The Council and European Parliament are currently negotiating the principles of the selection process of the new Authority’s seat location. Once the selection process has been agreed, the selection process for the seat will be concluded and the location will be introduced in the regulation.
Next steps
The text of the provisional agreement will now be finalised and presented to member states’ representatives and the European Parliament for approval. If approved, the Council and the Parliament will have to formally adopt the texts.
Negotiations between the Council and Parliament on the regulation on anti-money-laundering requirements for the private sector and the directive on anti-money laundering mechanisms are still ongoing.
Background
On 20 July 2021, the Commission presented its package of legislative proposals to strengthen the EU’s rules on anti-money laundering and countering the financing of terrorism (AML/CFT). This package consists of:
- a regulation establishing a new EU anti-money laundering authority (AMLA) which will have powers to impose sanctions and penalties
- a regulation recasting the regulation on transfers of funds which aims to make transfers of crypto-assets more transparent and fully traceable
- a regulation on anti-money-laundering requirements for the private sector
- a directive on anti-money-laundering mechanisms
The Council and Parliament reached a provisional agreement on the regulation on transfers of funds on 29 June 2022.
- Commission proposal on AMLA
- Commission proposal on the AML regulation
- Commission proposal on the AML directive
- Anti-money laundering: Provisional agreement reached on transparency of crypto asset transfers (press release, 29 June 2022)
- Fight against money laundering and terrorist financing (background information)