EU Bolsters Fight Against Money Laundering with New Authority AMLA

EU Establishes New Anti-Money Laundering Authority

The European Union is taking a decisive step to combat money laundering and terrorist financing with the creation of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). This significant development was highlighted by Bulgarian MEP Emil Radev, who announced the EU's enhanced control measures. Radev, a member of the European Parliament's Committee on Civil Liberties, Justice and Home Affairs, emphasized the critical need for such a body, citing Europol's estimate that approximately 1% of the EU's GDP, equating to EUR 130 billion annually, is linked to money laundering.

The establishment of AMLA is a central component of a comprehensive new anti-money laundering package adopted by the Council in May 2024 and approved by the European Parliament in April 2024. This legislative framework, published in the Official Journal of the EU on June 19, 2024, aims to harmonize AML and Counter-Terrorist Financing (CTF) rules across all Member States, creating a unified and more robust oversight system.

AMLA's Mandate and Operational Scope

AMLA, legally established in June 2024, is set to become operational in phases, with most activities commencing in mid-2025 and full functionality expected by January 2028. Its headquarters will be located in Frankfurt, Germany, a decision reached on February 22, 2024, following a joint vote by the European Parliament and Council. The authority is projected to grow to a staff of over 400 AML experts within four years.

The new authority's powers are extensive and include:

• Direct supervision over the 'riskiest' cross-border financial institutions.
• Indirect oversight of other entities through national supervisors.
• Establishing common supervisory approaches and technical standards.
• Maintaining an AML/CFT supervisory database.
• Overseeing the FIU.net platform to facilitate information exchange among Financial Intelligence Units (FIUs).
• The ability to impose significant fines, potentially up to 10% of annual turnover or €10 million, whichever is higher, on violators.

MEP Radev underscored that AMLA will coordinate policies and directly supervise the largest financial institutions, uniting staff from all EU member states' financial intelligence units. Furthermore, AMLA will monitor violations of sanction regimes, such as those imposed against Russia, and enhance control over financial flows originating from third countries, including Central Asia and China.

New Legislative Package Strengthens EU Framework

The broader AML package comprises three key legislative acts:

• AML Directive VI (Directive (EU) 2024/1640): This directive outlines responsibilities for national authorities and FIUs, covering beneficial ownership, bank accounts, and real estate registers. Member States are required to transpose it into national law by mid-2027.
• AML Regulation (Regulation (EU) 2024/1624): This regulation introduces binding rules for financial institutions concerning governance, customer due diligence (CDD), and reporting obligations, applying from mid-2027.
• AMLA Regulation (Regulation (EU) 2024/1620): This regulation formally establishes the Anti-Money Laundering Authority.

Key changes introduced by this package include stricter criteria for identifying Ultimate Beneficial Owners (UBOs) with a fixed 25% ownership threshold, mandatory periodic customer relationship reviews (annually for high-risk clients, at least every five years for others), and the inclusion of more crypto-asset service providers under the AML framework, alongside a ban on anonymous crypto accounts. These measures are designed to improve the detection of suspicious transactions, close existing loopholes, and ultimately strengthen the integrity of the EU's financial system.