Brussels wants to set up a new anti-money laundering authority with direct supervisory powers while seeking to recover illicit finances following a series of scandals.
The European Commission will present this month legislation to create the Anti-Money Laundering Authority (AMLA) according to project proposals seen by the Financial Times. It is due to launch operations in 2024.
The AMLA from 2026 will be able to directly control certain cross-border financial companies and may impose fines totaling millions of euros on companies that violate money laundering rules.
The legislative package represents the EU’s boldest attempt to tackle illicit finances following scandals across the bloc. Hundreds of billions of euros of suspicious transactions are estimated to occur each year in the European Union, but the Union’s response is hampered by irregular enforcement practices in Member States, and by a reluctance in some countries to fully implement them. existing directives against money laundering.
The aim of the commission is to better harmonize regulatory practices, strengthen coordination between national authorities and improve cross-border flows of information between countries ’financial intelligence units. The new authority will also directly monitor “riskier” financial sector companies that have operations in several EU Member States.
The package, which will have to be hammered out between the European Parliament and the Member States, will also create a single EU rulebook on anti-money laundering and terrorist financing, as well as new rules on well crypto. The new authority may impose fines, with total penalties not exceeding 10 percent of annual turnover or 10 million euros, depending on the highest.
The AMLA, which is expected to have a staff of 250 people, will play a “pivotal” role in the new regime, according to a memorandum accompanying the draft legislation establishing the new body. The proposals do not suggest a place for the body.
“By directly supervising and taking decisions against some of the most risky cross-border financial sector obligated entities, the Authority will directly contribute to preventing [money laundering and terrorism financing] in the union, ”says the draft document.
“It will coordinate national supervisory authorities and help them increase their effectiveness in applying the single rulebook and ensuring homogeneous, high-quality standards, approaches and risk assessment methodologies.”
Money laundering is a major problem in the EU, Europol estimates the value of suspicious transactions at 1.3 per cent of gross domestic product. A report by the European Court of Auditors last month warned that much more needs to be done to ensure that EU law in this area is put in place “promptly and coherently”, and that the current monitoring framework is in place. it is “fragmented and poorly coordinated.”
In recent years, scandals in the banking sector have highlighted the problems, even in 2018 when U.S. law enforcement authorities discovered the money laundering institutionalized in Latvian bank ABLV, now gone. , largely linked to Russia. Other scandals include suspicious transactions through the Estonian subsidiary of Danske Bank between 2007 and 2015.
“The package is certainly a big deal, years of paid pressure,” said Sven Giegold, a green MEP who has been pushing for a tougher EU regime. “The new anti-money laundering architecture is a big step forward for the EU and the common market.”
However, he also stressed that the commission needed to pursue infringement proceedings against states that failed to enforce the current regime. “We need a zero tolerance policy from the EU Commission against money laundering.”