EU Approves Creation of Anti-Money Laundering Agency to Combat Financial Crimes

The European Parliament and the Council of the European Union have agreed to establish a new agency, the Anti-Money Laundering Authority (AMLA), dedicated to combating money laundering and terrorist financing within the European Union. The agency aims to enhance coordination among national authorities to effectively detect and combat suspicious cross-border transactions.

Endowed with supervisory and sanctioning powers to ensure compliance with European financial regulations, the AMLA will directly oversee approximately forty credit and financial institutions considered most at risk. This includes providers of crypto-asset services, reflecting the evolving landscape of financial crimes.

Spanish MEP Eva Poptcheva, co-rapporteur of the political agreement, hailed the AMLA as a "game changer" in the fight against illicit financial activities within the EU. The agency is expected to play a crucial role in preventing the circumvention of targeted financial sanctions, such as those imposed by the EU against Russia.

The establishment of the AMLA is seen as a significant step in cracking down on money laundering, making it more challenging for illegal transactions to finance terrorist activities in Europe. According to Europol, suspicious financial activities currently account for approximately 1% of the EU's gross domestic product, amounting to around €130 billion.

The European Commission put forth the proposal for the creation of the Anti-Money Laundering Authority in July 2021. While a political agreement has been reached, formal approval is still pending from the Members of the European Parliament in plenary session and the Council of the European Union, representing the 27 Member States.

One critical decision remains to select the host city for the AMLA headquarters and its approximately 250 employees. Nine cities, including Paris, Brussels, Frankfurt, Dublin, Madrid, Rome, Riga, Vilnius, and Vienna, have submitted applications to the European Commission. The decision on the host city will be determined through a selection process, and the co-legislators plan to conduct hearings with the candidate cities expressing interest.