Final Draft Anti-Money Laundering Authority (AMLA) Regulation
The final draft of the „Regulation Establishing the Authority for Anti-Money Laundering (AMLA)“ marks a significant milestone in the European Union’s fight against financial crimes. This comprehensive framework is designed to enhance the effectiveness of anti-money laundering (AML) and counter-terrorism financing (CTF) measures, ensuring a unified and robust approach across member states.
The AMLA Regulation introduces a centralized authority with the mandate to oversee and coordinate AML/CFT activities, providing a harmonized regulatory environment. Key aspects include the establishment of a supervisory system, direct and indirect supervision mechanisms, and a strong emphasis on cooperation and information exchange among financial institutions and national authorities.
With the introduction of aggravating and mitigating factors for non-compliance, the regulation underscores the importance of adherence to AML/CFT obligations. The final draft outlines specific coefficients to adjust penalties, reflecting the severity and nature of breaches, thereby promoting a culture of compliance and accountability.
The regulation also details directly applicable requirements for customer due diligence, reporting obligations, and internal policies, setting a high standard for entities operating within the financial sector. This ensures a comprehensive and consistent approach to identifying and mitigating risks associated with money laundering and terrorist financing.
As the AMLA Regulation moves towards adoption, financial institutions and stakeholders are encouraged to familiarize themselves with the new requirements and prepare for their implementation. The final draft not only represents a significant step forward in the EU’s regulatory landscape but also reinforces its commitment to safeguarding the financial system against illicit activities.
For professionals and entities in the financial sector, staying informed about the AMLA Regulation is crucial for ensuring compliance and contributing to a more secure and transparent financial environment.
Anti-Money Laundering Authority Regulation (AMLAR)
| AMLAR |
|---|
| CHAPTER I ESTABLISHMENT, LEGAL STATUS AND DEFINITIONS |
| Article 1 Establishment and scope of action |
| Article 2 Definitions |
| Article 3 Legal Status |
| Article 4 Seat |
| CHAPTER II TASKS AND POWERS OF THE AUTHORITY |
| SECTION 1 TASKS AND POWERS |
| Article 5 Tasks |
| Article 6 Powers of the Authority |
| SECTION 2 AML/CFT SUPERVISORY SYSTEM |
| Article 7 Cooperation within the AML/CFT supervisory system |
| Article 8 AML/CFT supervisory methodology |
| Article 9 Thematic reviews |
| Article 10 Mutual assistance in AML/CFT supervisory system |
| Article 11 Central AML/CFT database |
| SECTION 3 DIRECT SUPERVISION OF SELECTED OBLIGED ENTITIES |
| Article 12 Assessment of credit and financial institutions for the purposes of selection for direct supervision |
| Article 13 The process of listing selected obliged entities |
| Article 13a Additional transfer of direct supervision tasks and powers in exceptional circumstances upon the request of a financial supervisor |
| Article 14 Cooperation within the AML/CFT supervisory system for the purposes of direct supervision |
| Article 15 Joint supervisory teams |
| Article 16 Request for information |
| Article 17 General investigations |
| Article 18 On-site inspections |
| Article 19 Authorisation by a judicial authority |
| Article 20 Administrative measures |
| Article 21 Pecuniary sanctions |
| Article 22 Periodic penalty payments |
| Article 23 Hearing of persons subject to proceedings |
| Article 24 Disclosure of administrative measures, pecuniary sanctions and periodic penalty payments |
| Article 24a Enforcement and allocation of pecuniary sanctions and periodic penalty payments |
| Article 25 Procedural rules for taking supervisory measures and imposing pecuniary sanctions |
| Article 26 Review by the Court of Justice of the European Union |
| Article 27 Language arrangements in direct supervision |
| SECTION 4 INDIRECT SUPERVISION OF NON-SELECTED OBLIGED ENTITIES |
| Article 28 Assessments of the state of supervisory convergence |
| Article 29 Coordination and facilitation of work of the AML/CFT supervisory colleges in the financial sector |
| Article 30 Requests to act in exceptional circumstances following indications of serious, repeated or systematic breaches |
| Article 30b Settlement of disagreements between financial supervisors in cross-border situations |
| Article 30c Action in case of systematic failures of supervision |
| SECTION 5 OVERSIGHT OF NON-FINANCIAL SECTOR |
| Article 31 Peer reviews |
| Article 31a Coordination and facilitation of work of the AML/CFT supervisory colleges in the non-financial sector |
| Article 32 Warning on breaches of Union rules by non-financial supervisors and public authorities overseeing self-regulatory bodies |
| Article 32a Settlement of disagreements between non-financial supervisors in cross-border situations |
| SECTION 6 FIUS SUPPORT AND COORDINATION MECHANISM |
| Article 32b Cooperation between the Authority and Financial Intelligence Units |
| Article 33 Conduct of joint analyses |
| Article 33a Dissemination of the results of joint analyses |
| Article 33b Request by the Authority for the initiation of joint analysis |
| Article 34 Review of the methods, procedures and conduct of the joint analyses |
| Article 35 National FIU delegates |
| Article 36 Mutual assistance in the area of cooperation between FIUs |
| Article 36a Mediation between FIUs |
| Article 37 FIU.net |
| Article 37a Peer review |
| SECTION 7 COMMON INSTRUMENTS |
| Article 38 Regulatory technical standards |
| Article 39 Exercise of the delegation |
| Article 40 Objections to regulatory technical standards |
| Article 41 Non-endorsement or amendment of draft regulatory technical standards |
| Article 42 Implementing technical standards |
| Article 43 Guidelines and recommendations |
| Article 44 Opinions |
| CHAPTER III ORGANISATION OF THE AUTHORITY |
| Article 45 Administrative and management structure |
| SECTION 1 GENERAL BOARD |
| Article 46 Composition of the General Board |
| Article 47 Internal committees of the General Board |
| Article 48 Independence of the General Board |
| Article 49 Tasks of the General Board |
| Article 50 Voting rules of the General Board |
| Article 51 Meetings of the General Board |
| SECTION 2 EXECUTIVE BOARD |
| Article 52 Composition and appointment of the Executive Board |
| Article 53 Tasks of the Executive Board |
| Article 54 Annual and multiannual programming |
| Article 55 Voting rules of the Executive Board |
| Article 55a Fundamental Rights Officer |
| SECTION 3 THE CHAIR OF THE AUTHORITY |
| Article 56 Appointment of the Chair of the Authority |
| Article 57 Responsibilities of the Chair of the Authority |
| SECTION 4 THE EXECUTIVE DIRECTOR |
| Article 58 Appointment of the Executive Director |
| Article 59 Tasks of the Executive Director |
| SECTION 5 ADMINISTRATIVE BOARD OF REVIEW |
| Article 60 Creation and Composition of the Administrative Board of Review |
| Article 61 Members of the Administrative Board of Review |
| Article 62 Decisions subject to review |
| Article 63 Exclusion and objection |
| CHAPTER IV FINANCIAL PROVISIONS |
| Article 64 Budget |
| Article 65 Fees levied on selected and non-selected obliged entities |
| Article 66 Establishment of the budget |
| Article 67 Implementation of the budget |
| Article 68 Presentation of accounts and discharge |
| Article 69 Financial rules |
| Article 70 Anti-fraud measures |
| Article 71 IT Security |
| Article 72 Accountability and reporting |
| CHAPTER V GENERAL AND FINAL PROVISIONS |
| SECTION 1 STAFF |
| Article 73 General provision |
| Article 74 Privileges and immunities |
| Article 74a Staff of the Authority previously employed by the European Banking Authority |
| Article 75 Obligation of professional secrecy |
| Article 76 Security rules on the protection of classified and sensitive non-classified information |
| Article 76a Reporting of breaches and protection of reporting persons |
| SECTION 2 COOPERATION |
| Article 77 Cooperation with European Supervisory Authorities |
| Article 78 Cooperation with non-AML/CFT authorities |
| Article 79 Partnerships for information sharing in the field of AML/CFT |
| Article 80 Cooperation with OLAF, Europol, Eurojust and the EPPO |
| Article 81 Cooperation with third countries and international organisations |
| SECTION 3 GENERAL AND FINAL PROVISIONS |
| Article 82 Access to documents |
| Article 83 General language arrangements |
| Article 84 Data protection |
| Article 85 Liability of the Authority |
| Article 86 Delegated acts |
| Article 87 Headquarters Agreement and operating conditions |
| Article 88 Evaluation and review |
| Article 89 Amendments to Regulation (EU) No 1093/2010 |
| Article 90 Amendments to Regulation (EU) No 1094/2010 |
| Article 91 Amendments to Regulation (EU) No 1095/2010 |
| Article 91a Transitional arrangements |
| Article 92 Commencement of the Authority’s activities |
| Article 93 Entry into force and application |
| ANNEX I |
| ANNEX II |
Chapter I: Establishment, Legal Status, and Definitions
The first Chapter sets the foundation of the authority, defining its scope, legal status, and key terms used throughout the regulation.
Chapter II: Tasks and Powers of the Authority
Chapter two outlines the responsibilities and powers granted to the authority, including its role in the AML/CFT supervisory system, direct supervision of selected obliged entities, and oversight of the non-financial sector.
Chapter III: Organisation of the Authority
Chapter three details the administrative and management structure of the authority, including the General Board, Executive Board, Chair of the Authority, Executive Director, and the Administrative Board of Review.
Chapter IV: Financial Provisions
Chapter four covers the financial aspects related to the operation of the authority, including its budget, fees, and anti-fraud measures.
Chapter V: General and Final Provisions
The final chapter addresses staff provisions, cooperation frameworks with other entities, and general provisions such as document access, data protection, and liability.
ANNEX I: Adjustment Coefficients for Aggravating and Mitigating Factors
Annex one provides a detailed list of coefficients that are applied cumulatively to the basic amounts for penalties as per Article 20(6), based on identified aggravating and mitigating factors:
Aggravating Factors:
- Repetition of Breach: Additional coefficient of 1.1 for each repetition.
- Duration Over Six Months: Coefficient of 1.5.
- Systemic Weaknesses: Coefficient of 2.2 if the breach indicates systemic organizational weaknesses.
- Intentional Infringement: Coefficient of 3.
- Lack of Remedial Action: Coefficient of 1.7 if no action is taken post-identification of the breach.
- Non-cooperation of Senior Management: Coefficient of 1.5 if the entity’s senior management does not cooperate with investigations.
Mitigating Factors:
- Preventive Measures by Senior Management: Coefficient of 0.7 if it can be shown that all necessary measures to prevent the breach were taken.
- Prompt and Effective Disclosure: Coefficient of 0.4 if the breach is quickly and fully brought to the Authority’s attention.
- Voluntary Future Safeguard Measures: Coefficient of 0.6 if measures are voluntarily taken to prevent future breaches.
ANNEX II: Directly Applicable Requirements
Annex two lists specific requirements that are directly applicable under various articles of the Anti-Money Laundering Regulation (AMLR) and the Terrorist Financing Recast (TFR recast):
- Customer Due Diligence: Requirements under AMLR Articles 15 to 21, 27 to 32, 34, 36, and 37.
- Group Policies and Procedures: Requirements under AMLR Articles 13 and 14.
- Reporting Obligations: Requirements under AMLR Articles 50 to 52 and TFR recast Articles 9, 13, and 18.
- Internal Policies, Controls, and Procedures: Requirements under AMLR Articles 7, 8, 9, 14a, 38, and 39, and TFR Article 23.
- Other Requirements: As listed under AMLR Articles 54, 56, 57, and 58, and TFR Articles 7, 8, 10 to 12, 14, 16, 17, 19, 21, 24, and 26.
These annexes are essential for understanding how penalties are calculated in case of non-compliance with the regulatory requirements and which specific AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) obligations are directly enforceable under the regulation.
Sources:
- Final Draft AMLAR https://data.consilium.europa.eu/doc/document/ST-6222-2024-INIT/en/pdf