Andreas Dehio and Dr Kerstin Wilhelm, 22 July 2021
Preventing and combating money laundering and terrorist financing has been on the EU’s agenda for more than 30 years. The legal and regulatory framework has been strengthened steadily. But now the European Commission has taken an ambitious step towards beating financial crime by overhauling the current EU anti-money laundering and countering terrorism financing rules.
The legislative proposals that were presented on 20 July will allow the EU to close any loopholes in the current rules where member states apply them differently, and bolster enforcement of the existing framework.
At the heart and centre of the legislative proposals being made by the EU Commission is creating an EU-wide overarching supervisory authority by 2024 – the Anti-Money Laundering Authority (AMLA). This new authority will not only have direct supervisory power with respect to some of the “riskiest cross-border financial sector obliged entities” but will also be tasked with coordinating the national supervisory authorities and with assisting the work of the EU’s Financial Intelligence Units.
Where the AMLA shall have its seat remains yet to be seen, but competition between member states is to be expected. But maybe even more importantly for the financial sector, the new rules intend to ditch the fragmented European landscape for AML.
Today, firms which are active in several member states, making use of EU passports to offer their services under harmonised rules for banking and securities trading, are confronted with different AML regimes. Although these are harmonised to a certain extent, key parameters such as when to conduct client due diligence or when to file suspicious activity reports follow country-specific AML rules.