Background
On the 13th of December the Council of the EU, the European Parliament and the Commission reached an agreement during the inter-institutional negotiations concerning the new Anti-Money Laundering Authority (AMLA).
‘'AMLA will be a game changer to crack down on dirty money in the EU. It will supervise the 40 riskiest financial entities and it will oversee the non-financial sector to prevent cases like the Pandora Papers. AMLA will also play a crucial role in avoiding the circumvention of targeted financial sanctions like the ones included in the 11 sanctions packages approved by the EU against Russia.' Co-rapporteur Eva Maria Poptcheva (Renew, Spain) said.
AMLA will have direct and indirect supervisory powers over high-risk obliged entities, establishing an integrated system with national competent authorities and supervisors to ensure compliance in the financial sector. Moreover, the Authority will play a supporting role vis-à-vis non-financial sectors and will coordinate financial intelligence units (FIUs).
1. Supervisory powers
AMLA will have direct supervisory powers over certain types of credit and financial institutions, such as crypto-asset service providers. Among its responsibilities, the Authority will monitor obliged entities to ensure they have established internal policies and procedures for executing targeted financial sanction asset freezes and confiscations. In addition, it will designate credit and financial institutions representing a high risk (i.e., those with operations in, at least, 6 Member States). The initial selection process will encompass up to 40 groups and entities, which will be supervised by joint teams led by AMLA. Furthermore, these teams will conduct assessments, inspections, and other related tasks. Non-selected obliged entities will be under the suepervision of national competent authorities .
Regarding the non-financial sector, the Authority will assume a supportive role by conducting assessments and probing potential violations in the implementation of the AML/CFT framework. In addition, AMLA will have the authority to issue non-binding recommendations. On top of that, AMLA will establish and regularly update a central database of information pertinent to the AML/CFT supervisory system.
2. Mechanisms reinforcing whistle-blowing
The Regulation establishing AMLA encompasses a reinforced whistle-blowing mechanism. The text includes provisions for establishing reporting channels to receive and handle information on breaches while protecting whistle-blowers. Furthermore, AMLA will only handle information regarding obliged entities within the financial sector and reports from national authorities and employees.
'The EP gave AMLA an important and strong role in the fight against money laundering. We hope that it will guarantee more financial security and better cooperation with national supervisors and FIUs in a cross-border environment, where risks have been growing at a constant pace. For the first time, AMLA will supervise directly the riskiest companies in the financial sector, as well as cryptocurrency providers that operate in several Member States.' Co-rapporteur Emil Radev (EPP, Bulgaria) stated.
3. Governance
The Authority will consist of a general board comprising representatives from Member State's FIUs and an executive board, serving as the governing body. The executive boeard will comprise the Authority's Chair and five independent members.
Next steps
The final text will be made public upon final endorsement at the Council and Parliament levels. In addition, it should be noted that the European Parliament and the Council of the EU are negotiating the principles of the selection process of AMLA's seat location. The co-legislators will organise meetings with the candidates that have expressed their interest.
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