Establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism

Following a number of prominent cases of alleged money laundering taking place at EU credit institutions, the European Commission concluded that reforms were necessary to be more effective and efficient in combatting Money Laundering and Financing of Terrorism (AML/CFT).

On 7 May 2020, the European Commission presented an Action Plan to take measures in order to strengthen the EU’s rules on combating money laundering and terrorism financing and defined six priorities or pillars:

1. Ensuring effective implementation of the existing EU AML/CFT framework;
2. Establishing an EU single rulebook on AML /CFT;
3. Bringing about EU-level AML/CFT supervision;
4. Establishing a support and cooperation mechanism for Financial Intelligence Units;
5. Enforcing EU-level criminal law provisions and improving information exchange;
6. Strengthening the international dimension of the EU AML/CFT framework.

The third pillar aims to establish the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). The purpose of the AMLA is to improve quality and effectiveness in AML/CFT supervision in the Union as it is currently uneven due to significant variations in resources and practices across Member States. The AMLA will become a centrepiece of an integrated AML/CFT supervisory system, consisting of the AMLA itself and the national authorities with an AML/CFT supervisory mandate.

The tasks of the AMLA will be

1. Directly supervising and taking decisions towards some of the riskiest cross-border financial sector obliged entities.
2. Reviewing and coordinating national supervisory authorities and assist them to increase their effectiveness in enforcing the single rulebook and ensuring homogenous and high quality supervisory standards, approaches and risk assessment methodologies (pillar 1 and 2).
3. Coordinate peer reviews for non-financial supervisors and request them to investigate possible breaches.
4. Improving the exchange of information and cooperation between FIUs (pillar 4).
5. Draft regulatory and implementing technical standards, guidelines and recommendations Also provide advice and input to the Commission and co-legislators on many aspects of AML/CFT policy, including on risks linked to jurisdictions outside the Union.

What does it mean for your business?

In case the national supervisory authority (DNB) has not taken adequate measures to address non-compliance in a timely manner, AMLA may take over supervision of your company where there have been problems related to compliance with applicable requirements.

There is no impact on the software we provide you.