EU's anti-money laundering campaign gains ground with establishment of new agency in Frankfurt
The European Union has established the Anti-Money Laundering Authority (AMLA), a newly created regulatory agency headquartered in Frankfurt, Germany, with a central role in combating money laundering and terrorist financing (AML/CFT) across Europe [1]. This move aims to unify and strengthen the enforcement of AML/CFT standards throughout the EU, replacing the previously fragmented national frameworks with a uniform system applied directly in all member states [1][2].
AMLA's key roles include oversight and enforcement, direct supervision of high-risk financial institutions, coordination with national authorities and Financial Intelligence Units (FIUs), the development of technical standards, and the management of a comprehensive database on AML/CFT matters [1]. In Germany, AMLA acts as the central AML supervisor for high-risk entities, coordinating with national authorities to ensure a unified approach [1].
The authority's location in Frankfurt is not solely a reflection of Germany's strong stance against money laundering but also a boost for the city's financial hub status. Hessian Minister-President Boris Rhein (CDU) views the start of AMLA as a further enrichment of the financial hub in Frankfurt [3]. The Hessian government has set itself the clear goal of strengthening the financial hub and making Frankfurt unquestionably Europe's number one financial hub [4].
AMLA's jurisdiction includes providers of cryptocurrency services and targets serious crimes such as organized crime, drug or human trafficking, and terrorism [1]. The EU's efforts against money laundering and terrorism financing are set to reach a new level with AMLA, as Finance Minister Lars Klingbeil (SPD) emphasizes [2]. Amla's goal is to target fraudsters, tax evaders, and money launderers where it hurts them most - their money and illegally acquired assets [5].
Despite Germany winning the bid to host AMLA, the country has a poor reputation for money laundering, being seen as a paradise for money laundering partly due to the traditional use of cash [6]. A study by Nasdaq subsidiary Verafin estimated that around $750 billion (currently around €635.6 billion) in illegal funds were laundered through the European financial system in 2023, with around $130 billion (17%) attributed to Germany, making it the top country in Europe, ahead of the UK and France [7].
AMLA represents a significant evolution in the fight against money laundering in Europe by consolidating supervisory functions, offering direct oversight of critical financial institutions, fostering cooperation between EU and national bodies, and establishing consistent standards—strengthening Germany’s and other member states’ ability to combat money laundering more effectively [1][2]. AMLA will also coordinate and support national supervisory authorities, unifying the 27 different systems across Europe for combating money laundering to prevent gaps that criminals can exploit [8].
- The European Union's Anti-Money Laundering Authority (AMLA), based in Frankfurt, will oversee finance and business sectors, particularly high-risk institutions, and work closely with national authorities and Financial Intelligence Units (FIUs) to combat money laundering and terrorist financing (AML/CFT) across the EU.
- Germany's poor reputation for money laundering, partly due to the traditional use of cash, notwithstanding, the establishment of AMLA signifies a step forward in Europe's general-news and crime-and-justice landscapes, with the authority's goal being to target fraudsters, tax evaders, and money launderers.
- In the realm of politics, the EU's Anti-Money Laundering Authority (AMLA) represents a significant evolution in combating money laundering in Europe, as it consolidates supervisory functions, offers direct oversight of critical financial institutions, fosters cooperation, and establishes consistent standards to strengthen member states' ability to combat money laundering more effectively.
