The European Council and Parliament have agreed to establish a new authority called the Anti-Money Laundering Authority (AMLA).
AMLA will have audit powers over high-risk obliged entities in the financial sector, coordinate financial intelligence units in member states, and ensure obliged entities comply with anti-money laundering and countering the financing of terrorism (AML/CFT) related obligations. The authority will have a supporting role concerning financial sectors and will have a general board and an executive board. Additionally, the agreement introduces a reinforced whistle-blowing mechanism. The new authority's seat location is yet to be decided.
Audit Powers of the New Organisation
Additionally, AMLA will have a supporting role with respect to financial sectors, carrying out reviews and investigating possible breaches in applying the AML/CFT The authority will have the power to issue non-binding recommendations. National audits will be able to voluntarily set up a college for a financial entity operating across borders if deemed needed.
The Aim and Administration of AMLA
The Authority will ensure that obliged entities have internal policies and procedures to implement financial sanctions, asset freezes, and confiscations.
Regarding administration, AMLA will have a general board composed of representatives of audits and Financial Intelligence Units from all member states and an executive board that would be the governing body of the AMLA, composed of the chair of the authority and five independent full-time members. The Council and the Parliament removed the Commission’s veto right on some of the powers of the executive board, notably its budgetary powers.
The new Authority's seat location is yet to be decided, and negotiations on the regulation on AML requirements for the private sector and the directive on AML mechanisms are still ongoing.
The provisional agreement aims to enhance the whistle-blowing mechanism. AMLA will only consider reports related to the financial sector and will also accept reports from employees of national authorities. Any disputes or disagreements will be resolved with a binding effect in the context of financial sector colleges. In any other case, a financial supervisor can request a resolution.
What are the Next Steps?
The process of creating a preliminary agreement text can be quite complex and requires significant effort from all involved parties. Currently, the preliminary agreement text is under review and will be finalized shortly. Once finalized, the text will be shared with the member states' representatives and the European Parliament for approval. If approved, both the Council and the Parliament will need to adopt the texts formally.
It is important to note that negotiations on the regulation regarding Anti-Money Laundering (AML) requirements for the private sector and the directive on AML mechanisms are still ongoing between the Council and the Parliament. This indicates that the regulatory landscape is constantly changing and evolving. It is crucial for businesses to stay up-to-date with the latest regulations and ensure that they are compliant with all applicable laws and regulations.
It is worth mentioning that the use of AI and other tools can be incredibly helpful for businesses in complying with the upcoming mandatory regulations. New tools like Sanction Scanner can help businesses automate their compliance processes and avoid costly mistakes. With the increasing number of sanctions regulations, it is essential for businesses to leverage the latest technologies to ensure that they are meeting all compliance requirements.
