Key component of the Anti-Money Laundering (AML) Package, the EU Proposal for Regulation 2021/0240 setting up the AMLA, which is expected to be examined in the plenary session of the European Parliament in April 2024, addresses a need to ensure a high level of protection for the financial system within the European Union and to enhance its resilience by addressing the risks of money laundering and terrorist financing, including those from third countries. Endowed inter alia with powers to oversee and coordinate the actions of financial intelligence centers, the AMLA will have broad powers of control and sanction over the various stakeholders.
Composition & Purpose
Composed of a General Council including representatives of supervisors and financial intelligence centers from all Member States as well as an Executive Board featuring a president and five independent members. The Executive Board will be responsible for directly overseeing and supervising selected obliged entity ('SOEs') within the Union and indirectly overseeing non-selected obliged entity ('NSOEs'), as well as non-financial entities of the Union in AML/CFT matters.
Direct control
The AMLA will undertake a direct surveillance over the SOEs. These entities are identified in a list drawn up every 3 years. The list is capped at 40 entities per cycle. The initial selection of SOEs is scheduled for July 2025.
As direct supervisor of the SOEs the AMLA may request any necessary information from SOEs, their employees and service providers.
Deriving from its role of direct supervisor of SOEs, the AMLA may also carry out on-site investigations and controls at SOEs and their affiliates within the Union, with the support of the national supervisor.
In the event of identified failures, the AMLA may particularly request strengthening of measures, compliance plans, specific policies or restrict economic activity and even impose modifications to the governance structure of the SOEs.
The AMLA will conduct periodic checks to ensure that local financial supervisors and authorities are operating effectively and have adequate powers to carry out its mission.
Indirect control
As the indirect supervisor of the NSOEs, and provided that the national supervisor informs the AMLA that an NSOEs is not efficient in its AML/CFT procedures or too exposed to AML/CFT risks, and that it has evidence of serious failures to AML/CFT obligations, the AMLA may request the supervisor to conduct on-site investigations and consider sanctions.
Direct Sanction Power
In order to ensure that its duties are carried out efficiently, the AMLA is granted a number of powers of sanction.
Decided by the AMLA executive board, these sanctions can be administrative fines, which can either supplement or complement other measures such as the strengthening of AML/CFT frameworks.
In order to terminate a violation, the executive board may also impose penalties. The duration of these penalties is limited to six months. Administrative sanctions and penalties will be made public. Administrative sanctions and penalties are also cumulative with criminal sanctions if the infringements fall within the scope of criminal law. The CJEU has jurisdiction over appeals against AMLA decisions.
Given its numerous powers, there is no doubt that the AMLA, whose headquarters is coveted by Paris, will become a key and efficient component of AML/CFT within the European Union as soon as it is established in the coming months.
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