Author: Lucie Sýkorová, HlidaciPes.org
The new European anti-money laundering agency, AMLA, launched its first recruitment process this week. It is looking for five members of the board to run the organisation. AMLA will be based in Frankfurt, Germany, and will employ more than 430 people. It will take over supervision of the banking sector from the European Banking Authority (EBA), which is currently responsible for this activity, after 2025. It has been based in Paris since 2019, having moved from London after Brexit.
The Anti-Money Laundering Agency (AMLA) was officially established by a regulation that entered into force at the end of June. It is part of a package of measures that European politicians have been working on since 2021. According to politicians, the new measures are intended to completely change the rules of the game.
The European Commission first announced plans to set up the new agency in July 2021. Politicko reported at the time that the Commission was admitting that the Paris-based regulator, the EBA, had failed to combat money laundering. In 2019, the European Commission estimated that around one percent of European wealth, equivalent to around €160 billion, was involved in “suspicious activity.” “The EU’s approach to money laundering, with the EBA at its core, clearly lacks teeth, as the scandals with Danske Bank and ING in recent years have shown,” Finnish MEP Eero Heinäluoma said at the time.
Weaknesses in the systems
The new agency, combined with a new package of measures, is now set to change the situation. “The AMLA will be more effective as a supervisory authority than the EBA because it will focus exclusively on anti-money laundering (AML) and not on a wider range of (theoretically sometimes conflicting) issues, as is the case with the EBA.
The management bodies and staff will be selected based on their experience with AML and will therefore be better able to detect risks and address emerging trends than the EBA,” Czech MEP Luděk Niedermayer, who has long been involved in anti-money laundering legislation and participated in the creation of the new directive, told the website HlídacíPes.org.
“A big difference is also that AMLA will have an overview of the cross-border aspect of cases, instead of having to collect information piecemeal from national supervisors, which the EBA had to do. Concentrating information in one place will help improve practice at national level and reduce the risk of vulnerabilities (= means a weak national system) that could allow illegal funds to penetrate the EU,” Niedermayer explained.
AMLA’s powers will include direct supervision of certain credit and financial institutions, including crypto-asset service providers, if they are considered high-risk or operate cross-border. In the first phase, around 40 selected entities should be involved. Those that are not selected will continue to be supervised by national authorities. “Amla will supervise entities that operate in at least six Member States and have a high risk profile. The criteria will be developed by AMLA and will be updated regularly,” Luděk Niedermayer specified.
27 million euros per year
The AMLA is now being prepared and launched by a working group under the European Commission’s Directorate-General for Anti-Money Laundering. At the beginning of September, it launched a competition for five full-time members of the executive board. Candidates must be citizens of an EU member state, have at least 15 years of postgraduate professional experience and at least 10 years of experience in a managerial position.
They must also be fluent in at least two of the EU’s official languages. The members of the executive board will be appointed for an initial four-year term, which can be extended once.
A competition for the office’s president, who will lead the executive board, was held in July. The winner is expected to be announced by the end of the year. The annual salary for this position will be almost 290,000 euros, Reuters reported.
By the end of 2025, AMLA plans to recruit approximately 120 experts in the following areas: anti-money laundering, legal services, budget, human resources, IT, communications, etc. The first batch of external positions and the selection procedure for the Executive Director of the agency will also be published at the turn of December 2024/January 2025. Middle management positions will be published from the first half of 2025.
AMLA is expected to start most of its activities in mid-2025. It is expected to reach full staffing levels in 2027 and start direct supervision of some high-risk financial entities in 2028. The Authority is expected to employ more than 430 staff. Of these, more than 200 will work in direct supervision of some obliged entities. They will work in teams that will also include staff from national authorities currently responsible for supervising these entities.
AMLA’s annual budget will gradually increase from 2024 to 2027. In total, around €119 million will be available for this period.
The Authority will then operate with an annual budget of around €92 million. Of this amount, approximately 30% of the costs, i.e. around 27 million euros, will be covered by the EU budget and 70% (65 million euros) will be covered by the financial sector.
During the selection procedure for the agency’s headquarters, the German government promised, through Finance Minister Christian Lindner, that Germany would provide the agency with ten million euros for rent in the first years, with the country being prepared to offer additional, significantly higher financial support if necessary.
Why Frankfurt?
This is the first time that the European Parliament has participated in the selection of the headquarters of the new office; previously, only the Council had made the decision. The involvement of MEPs was based on a decision by the European Court of Justice in a case where Italy and the city of Milan challenged the Council’s decision to locate the European Medicines Agency (EMA) in Amsterdam after Brexit and the European Labour Authority (ELA) in Bratislava.
Representatives of the Council of the EU and the European Parliament organised a joint public hearing at the end of January of the candidates who presented the offers of nine countries. Brussels, Dublin, Frankfurt, Madrid, Paris, Riga, Rome, Vienna and Vilnius were the candidates for the seat of the Anti-Money Laundering Authority (AMLA).
The reason why Frankfurt ultimately won is not entirely clear. In the first round of voting in the Council, it received 49 votes out of 162, according to the AML intelligence server. But that would not have been enough to win. Frankfurt was reportedly only shortlisted in the Renew faction. But even there, some French MEPs eventually called for its exclusion, citing Frankfurt’s latest poor assessment by the Financial Action Task Force (FATF), an intergovernmental body that creates international standards in the fight against money laundering.
Czech MEP Luděk Niedermayer said he tried to get at least his EPP (European People’s Party) group to take the geographical balance criterion into account. He therefore proposed supporting Vilnius, but his proposal was not accepted. “We have lost confidence in Europeanism, but also in the fact that the European Parliament will bring fairness and transparency to the process. My colleagues have let me down,” Niedermayer told the website HlídacíPes.org in February.
The new EU rules, which were adopted together with the decision to establish the AMLA agency, will also apply to the crypto-asset sector, traders in luxury goods such as precious metals and gemstones, and jewelers, watchmakers and goldsmiths. Traders of luxury cars, aircraft and yachts, as well as cultural goods (such as works of art), as well as professional football clubs and agents, will also become obliged entities.
“One of our key goals was to ensure that white-collar criminals can no longer launder their money through the purchase of expensive cars, yachts and private jets. With the new rules, it will be much harder for the richest and most powerful people to invest in the EU without proper checks and to circumvent sanctions. Information about their toys will have to be shared with the authorities,” believes Dutch S&D MEP Paul Tang.
