The Authority for Anti-Money Laundering and Countering the Financing of Terrorism (“AMLA”), was legally established on the 26th of June 2024 following the publication of the AMLA Regulation in the Official Journal, and is set to be headquartered in Frankfurt, Germany. The creation of AMLA was initially proposed in 2021 as part a legislative package harmonising AML/CFT rules across the EU, which has since been approved by the Parliament and adopted by the Council.
The Role of AMLA:
AMLA is mainly intended to have a twofold role:
- To directly supervise selected financial sector entities that operate on cross border basis and present high risk of money laundering and terrorism financing, as well as indirectly supervise other entities in the financial and non-financial sectors.
- To support and coordinate Financial Intelligence Units (FIUs) by facilitating joint cross-border cases analyses, enabling controlled information exchange, providing capabilities, advanced data analytics and managing the common FIU.net information system.
Moreover, AMLA will also be issuing its own guidelines and technical standards to complement EU AML/CFT rules.
Supervisory Function
Although AMLA is set to become operational in summer of 2025, its direct supervision function is scheduled to begin in 2028. This will follow an assessment and selection process carried out in 2027, through which 40 of the riskiest obliged entities operating in the financial sector will be chosen. In exceptional circumstances, a financial supervisor may request AMLA to assume direct supervision of a non-selected obliged entity. Direct supervision will be carried out by Joint Supervisory Teams composed of staff members from AMLA and from the national supervisor. AMLA may require the submission of internal documents and information and may carry out on-site inspections. In case of non-compliance, AMLA may take administrative measures and impose pecuniary sanctions.
AMLA and National FIUs
Direct supervision will still be exercised by national authorities. Nevertheless, AMLA will oversee supervision indirectly by performing periodic assessments of financial supervisors, settle disputes between such supervisors in cross-border situations, act in case of systematic failures of supervision and request financial supervisors to take specific measures.
In the interim, the European Banking Authority (EBA) will retain its AML/CFT powers and mandates until December 2025 to minimise disruption and provide continuity, and it will also continue working closely with AMLA going forward. Throughout the transition phase, the EBA will also support national competent authorities getting ready for AMLA and will coordinate with the European Commission’s AMLA taskforce, which will be responsible for the establishment and initial operations of AMLA.
Get in touch with Shoulder Compliance on info@shoulder.mt for more information about how we can assist you in implementing and effective AML/CFT compliance program.
