Brussels: Europe and the Arabs
Today the Council of States and the European Parliament reached an interim agreement on the establishment of a new European Anti-Money Laundering and Terrorist Financing Authority (AMLA) – the centerpiece of the anti-money laundering package, which aims to protect EU citizens and the EU financial system. Against money laundering and terrorist financing.
AMLA will have direct and indirect supervisory powers over high-risk compliant entities in the financial sector. This agreement excludes a decision on the location of the agency's headquarters, which is still under discussion in a separate track.
A European statement issued in Brussels on Wednesday morning said, “Given the cross-border nature of financial crimes, the new authority will work to enhance the efficiency of the framework for combating money laundering and the financing of terrorism, by establishing an integrated mechanism with national supervisory authorities to ensure the compliance of entities obligated to financial crime.” Commitments related to combating money laundering. and terrorist financing in the financial sector. AMLA will also have a supporting role in relation to non-financial sectors, coordinating financial intelligence units in member states.
In addition to the supervisory authorities and in order to ensure compliance, in cases of gross, systematic or repeated violations of directly applicable requirements, the Authority will impose financial sanctions on the selected obligated entities.
Supervisory authorities
The interim agreement adds powers to AMLA to directly supervise certain types of credit and financial institutions, including crypto-asset service providers, if they are considered high-risk or operate cross-border.
AMLA will implement a selection of high-risk credit and financial institutions in several Member States. The selected obligated entities will be supervised by joint supervisory teams led by AMLA who will, among other things, conduct assessments and inspections. The agreement entrusts the Authority with supervising up to 40 groups and entities in the first selection process.
For non-selected obligated entities, AML/CFT supervision will remain primarily at the national level.
For the non-financial sector, AMLA will have a supporting role, undertaking reviews and investigating potential violations in the application of the AML/CFT framework. AMLA will have the ability to issue non-binding recommendations. National supervisors will be able to voluntarily establish a cross-border non-financial entity if necessary.
The temporary agreement expands the scope and content of the supervisory database for combating money laundering and terrorist financing by requiring the Authority to create and update a central database of information related to the supervisory system for combating money laundering and terrorist financing.
Targeted financial sanctions
The Authority will monitor that the selected obligated entities have internal policies and procedures in place to ensure the implementation of targeted financial sanctions and asset freezes and confiscations.
Judgment
AMLA will have a General Council consisting of representatives of supervisors and FIUs from all Member States, and an Executive Board, which will act as the governing body of AMLA, consisting of the Chairman of the Authority and five full-time independent members.
The Council and Parliament abolished the Commission’s veto power over some of the Executive Council’s powers, especially its budgetary powers.
Corruption detector
The interim agreement provides an enhanced mechanism for reporting violations. With regard to obligated entities, the Anti-Money Laundering Law will only deal with reports from the financial sector. He will also be able to attend reports submitted by staff of national authorities.
Disagreements
The AMLA will be given the power to resolve disputes with binding effect in the context of financial sector colleges, and in any other case, at the request of the Finance Supervisor.
Anti-Money Laundering Bench
The Council and the European Parliament are currently negotiating the principles of the process for selecting the location of the new body's headquarters. Once the selection process is approved, the selection process for the seat will be completed and the location will be listed.
Next steps
The text of the Interim Agreement will now be finalized and submitted to representatives of Member States and the European Parliament for approval. If approved, the Council and Parliament will have to formally adopt the texts.
Negotiations between the Council and Parliament regarding a list of anti-money laundering requirements for the private sector and guidance on anti-money laundering mechanisms are still ongoing
On 20 July 2021, the Commission presented a package of legislative proposals to strengthen EU rules on anti-money laundering and countering the financing of terrorism (AML/CFT). This package consists of:
The regulation creates a new EU Anti-Money Laundering Authority (AMLA) which will have powers to impose sanctions and penalties
The regulation rewrites the Money Transfer Regulation which aims to make crypto asset transfers more transparent and fully traceable
Regulation of anti-money laundering requirements in the private sector
Guidance on anti-money laundering mechanisms
The Council and Parliament reached a provisional agreement on the Money Transfer Regulation on June 29, 2022.