What do you need to know about the EU’s new Anti-Money Laundering Authority?

EU AMLA is a regulatory body designed to centralize and strengthen anti-money laundering and counter-terrorist financing (AML/CTF) supervision across EU member states. Set to be fully operational by late 2025, many are saying its establishment indicates a bold step on the part of the EU in the fight against financial crime.

So, what do you need to know about EU AMLA?

Why was EU AMLA created?

For years, the EU faced challenges in enforcing AML/CTF measures effectively. Before AMLA, each member state implemented AML directives independently, resulting in a fragmented system. This led to inconsistencies, inefficiencies and loopholes that criminals could easily exploit. Several high-profile money laundering scandals further exposed the weaknesses of the existing framework, prompting the EU to take decisive action.

The key drivers

Money laundering scandals: Cases such as the Danske Bank scandal (where over €200 billion in suspicious transactions flowed through its Estonian branch) and issues involving Swedbank and Deutsche Bank highlighted failures in national oversight.
Fragmented national systems: Without a centralized authority, enforcement varied widely across EU nations, creating gaps that criminals could take advantage of.
Emerging financial threats: The rise of digital assets, anonymous shell companies, and cross-border financial transactions posed new challenges that required a more unified response.
Ineffective coordination: Previous EU institutions, like the European Banking Authority (EBA), lacked sufficient enforcement power to hold countries accountable.
Regulatory momentum: With the introduction of the 5th and 6th AML Directives, the EU recognized that a single authority was needed to ensure proper enforcement.
Reputation and global standing: The EU needed to protect its financial system’s integrity and maintain investor confidence by demonstrating a strong stance against financial crime.

What exactly will EU AMLA do?

The EU AMLA, which will be headquartered in Frankfurt, will play a critical role in ensuring uniform application of AML rules across member states. Its core functions include:

the ability to oversee “selected obliged entities,” which are high-risk financial institutions operating in at least six EU countries
the power to impose sanctions on institutions that fail to comply with AML regulations
improving information sharing and enforcement actions across the EU to close existing loopholes

One of AMLA’s key objectives is to create a uniform regulatory environment. Previously, AML/CTF measures varied between countries, leading to regulatory arbitrage where criminals exploited differences in national laws. EU AMLA will ensure:

Consistent implementation of AML/CTF rules across all member states
Stricter measures for identifying beneficial ownership
A more streamlined and efficient approach to monitoring illicit financial flows

Financial crime is evolving rapidly, particularly with the rise of digital currencies and sophisticated money laundering techniques. EU AMLA will address these challenges by:

Strengthening regulations around digital assets and cryptocurrencies
Enhancing scrutiny on cross-border financial activities
Cracking down on the misuse of shell companies and anonymous transactions

How will EU AMLA operate?

The authority will be phased in over the coming years:

2025: EU AMLA is expected to be fully operational
2027: The selection process for “selected obliged entities” will begin
2028: Direct supervision of high-risk financial institutions will commence

Financial institutions operating across multiple EU member states will face stricter oversight. Compliance teams should prepare for:

More rigorous AML compliance requirements
Greater transparency obligations regarding beneficial ownership
Potential sanctions for non-compliance
Stronger collaboration with national regulators

The EU AMLA marks a significant shift in the way Europe combats money laundering and terrorist financing. By centralizing authority and enhancing enforcement powers, the EU is strengthening its financial system against illicit activities. Businesses and financial institutions must stay ahead by adapting to these changes and ensuring compliance with the evolving AML landscape.

With the upcoming implementation of EU AMLA, the EU is setting a new global standard for AML enforcement. You need to be prepared.

Download our free comprehensive guide to everything you need to know about EU AMLA.

How are you managing your GDPR compliance requirements?

GDPR added a significant compliance burden on DPOs and data processors. Data breaches must be reported to the authorities within 72 hours, each new data processing activity needs to be documented and Data Protection Impact Assessments (DPIA) must be carried out for processing that is likely to result in a high risk to individuals. Penalties for breaching GDPR can reach into the tens of millions of Euros.

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