Towards an updated AML reality

The European Union is advancing its sweeping overhaul of its anti-money laundering and counter-terrorist financing (AML/CFT) rules. With the establishment of a dedicated supervisory authority, the EU aims to harmonise and strengthen its actions in the area.

At the heart of the new AML package is the creation of the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). Based in Frankfurt and expected to be operational in the coming years, taking over tasks of both national competent authorities and the EBA, AMLA will hold both supervisory and coordination powers across the EU, with the ability to directly oversee certain high-risk financial institutions.

In preparation for AMLA’s future mandates, the European Banking Authority (EBA) has just finished a consultion on Regulatory Technical Standards (RTSs) that will shape how AMLA identifies and monitors relevant institutions, assesses risks, and enforces rules. The consultation formed part of the EBA’s broader response to the European Commission’s Call for advice on the AMLA mandates.

The EBA addresses four critical areas, i.e. eligibility for direct supervision by AMLA, harmonised risk assessments across the EU, proportionality and effectiveness in Customer Due Diligence, and  harmonised approaches to sanctions and enforcement.

While the objective of supervisory convergence enjoys broad support, financial institutions have expressed concerns that the proposed RTSs could significantly increase reporting obligations—potentially expanding the number of required data points from a few dozen to over eighty. They have also highlighted risks to the ability to ensure a relevant and frictionless customer journey, particularly in relation to low-risk products such as consumer credit, without corresponding benefits to justify the added burden.

Even some national supervisors have already voiced concern that the expanded data collection obligations could substantially exceed what is necessary for effective oversight activities. There is growing recognition that, while harmonisation is essential, it must be pursued in a way that avoids unnecessary duplication, inefficiencies, or excessive paperwork, especially where existing national processes already work well.

The EBA will consider the feedback received to this consultation when finalising the response to the European Commission’s Call for advice. Eurofinas is active on the file and will continue to monitor developments closely and engage with relevant stakeholders