top of page
  • yazannukkari

Building Stronger Safeguards for the New EU Anti-Money Laundering Authority

How the ECB Recommends AMLA be Made More Effective?

The European Parliament is preparing to vote on the draft AMLA Regulation, and the trilogue phase will begin shortly after. This stage is crucial, as the success of the new Anti-Money Laundering Authority (AMLA) depends on it effectively fulfilling its mission. To ensure this, the ECB (European Central Bank) recommends three primary safeguards. These are adequate cooperation channels, access to broad data, and sufficient supervisory capacities. In this article, we will delve into these recommendations to explore how AMLA can become more effective.

The Right Supervisory Capacities

For AMLA to become a strong and independent authority, it needs to have a broad scope of direct supervision. Ideally, it should cover at least one entity or group in each Member State. The ECB welcomes the Council of the European Union’s proposal to increase the number of entities under AMLA’s direct supervision to up to 40, allowing for further expansion in the future.

AMLA must also have sufficient staff for on-site anti-money laundering (AML) and countering the financing of terrorism (CFT) inspections, which are crucial for developing a feel for what is going on at supervised entities. Access to individual transaction data and files is especially important for AML/CFT supervision. It is, therefore, essential that AMLA can rely on a sufficiently large pool of qualified on-site examiners. Based on the ECB’s experience with prudential banking supervision, responsibilities for on-site examinations and off-site supervision should be allocated to different teams, and the capacity to use cross-border teams is invaluable.

The Right Data

AMLA needs to have broad access to high-quality data to be effective. The creation of a standardized way to collect information is essential for AMLA to gain a consistent and comprehensive overview of AML/CFT across the EU. During the set-up phase, AMLA may not have sufficient data on the entities it supervises to perform its tasks adequately. Therefore, access to information collected under the existing national AML/CFT reporting framework is indispensable, at least during the initial period.

Granting AMLA access to relevant financial reporting and prudential information, in addition to supervisory information from other types of authorities, would provide a better picture of the environment in which supervised entities operate. Having access to the right data would also be essential for AMLA’s indirect supervision since most firms would not be directly supervised by AMLA. AMLA could act as the nucleus for the exchange of information between diverse supervisory authorities.

The Central Data Hub

To enhance the efficiency and effectiveness of cooperation and information sharing between authorities, AMLA requires a powerful central data hub. This data hub would facilitate information sharing between AMLA and AML/CFT authorities. It would also allow non-AML authorities such as prudential supervisors to access this database when required. AMLA has a unique opportunity to go beyond existing instruments to create a new AML/CFT database, ensuring improved collection and use of all available information on ML/TF risks.

The unintegrated nature of existing instruments can result in overlaps and reporting burdens, hampering the effective dissemination of information. By creating a central data hub, AMLA can maximise the utility of AML/CFT-related information gathered by different authorities. This would allow risks to be tackled from all relevant perspectives and facilitate rapid action where needed.

The creation of AMLA as the centre of the new EU AML/CFT supervisory system is vital for the EU’s fight against money laundering and terrorist financing. It is, therefore, crucial that EU co-legislators’ About Flaminem

Flaminem is a software company, which offers a cloud-based platform to digitize the KYC processes of your customers and / or suppliers.


bottom of page