AMLA: the new European authority at the heart of AML/CFT supervision

Why a dedicated European authority?

The previous framework relied heavily on national authorities, varying supervisory practices and implementation that was often influenced by the specific characteristics of each jurisdiction. This organisation could lead to discrepancies in risk assessment, the supervision of cross-border groups and the handling of cases involving multiple Member States.

AMLA was created to strengthen the consistency of the system, improve the quality and convergence of supervision, facilitate information exchange, and support cooperation between financial intelligence units.

The regulation establishing AMLA generally applies from 1 July 2025. The seat of authority is established in Frankfurt am Main, Germany.

The 1 January 2026, the European Banking Authority and AMLA have completed the transfer of the AML/CFT mandates and functions from the European Banking Authority to AMLA.

Three complementary functions

AMLA also contributes to the development of the European regulatory framework by preparing draft technical standards, guidelines, and other instruments provided for by Union legislative acts.

Which entities will be able to be directly supervised?

Permanent direct supervision does not apply to all obliged entities. The process targets credit institutions, financial institutions or financial groups that meet the eligibility criteria and present a high level of residual risk of money laundering or terrorist financing.

Entities or groups carrying out activities in at least six Member States may be eligible under the conditions laid down by the applicable regulation and methodology. Eligibility does not automatically lead to selection.

AMLA assesses inherent risk, then residual risk after considering the entity's policies, procedures, and controls. The first selection cycle is expected to take place in 2027. AMLA's official documentation provides for the selection of up to 40 entities or groups during this first cycle, for a start of direct supervision in 2028.

How will direct supervision work?

For each selected entity, supervision will rest with a joint team comprising AMLA staff and representatives from the relevant national authorities.

As part of its remit, AMLA will be able, among other things, to:

• assess compliance with applicable European AML/CFT requirements; ;
• examine governance, policies, procedures, and internal controls; ;
• carry out AML/CFT prudential reviews, investigations and on-site inspections; ;
• request corrective actions ;
• to take administrative measures when the legal conditions are met; ;
• to impose financial penalties and daily fines within the framework provided for by the regulation.

The selection process must be renewed periodically. AMLA's regulations and official publications provide for a selection cycle every three years.

National authorities remain at the heart of the system

Financial entities not selected for direct supervision remain primarily under the oversight of their national supervisor. AMLA and national authorities together form the European AML/CFT supervisory system.

For the financial sector as a whole, AMLA promotes the convergence of methods, facilitates supervisory colleges, coordinates certain information exchanges and helps to resolve divergences in the conditions provided for by the regulation.

What about the non-financial sector?

AMLA's ordinary role in the non-financial sector mainly concerns the coordination and convergence of supervisory practices. This may include, in particular, assessments, benchmarking, guidelines, and support for supervisory colleges.

A lawyer, an accountant, a real estate agent or another obliged non-financial entity should therefore not consider AMLA to be automatically their direct supervisor on a day-to-day basis. The supervisory relationship will, in principle, remain organised at the national level.

AMLA supports CRFs, but doesn't replace them

AMLA has a specific mandate to strengthen cooperation between financial intelligence units. Its role includes supporting joint analysis of cross-border cases, developing common methodologies, providing analytical capabilities, and supporting secure information exchange.

However, national Financial Intelligence Units (FIUs) remain responsible for receiving suspicious transaction reports, analysing them, and disseminating the results to the relevant national authorities.

Distinguishing between binding texts and projects and consultations

AMLA has numerous mandates to prepare technical standards, guidelines, recommendations and methodologies. However, not all documents published by the authority have the same legal status.

• The AMLA Regulation, the AMLR and AMLD6 are legislative acts adopted by the European Parliament and the Council.
• A draft technical standard prepared by the AMLA remains a draft until the applicable adoption procedure is completed.
• A technical standard becomes binding after its formal adoption by the Commission and its publication as an applicable legal act.
• A guideline or recommendation does not have the same status as a delegated or implementing regulation.
• A consultation document should never be presented as a definitive obligation that is already in effect.

This distinction is essential in internal policies and regulatory training. The date, version, and legal status of each document must be clearly indicated.

The main stages of the calendar

• 19 June 2024
  Publication of Regulation (EU) 2024/1620 establishing AMLA.
• 1 July 2025
  General application date of the AMLA Regulation.
• 1 January 2026
  Completion of the transfer of AML/CFT mandates and functions from the European Banking Authority to the AMLA.
• 2027
  First selection cycle of entities or groups intended for direct supervision.
• 2028
  Planned start of direct supervision of selected entities, in accordance with AMLA's official timetable.

How can organisations prepare?

The following measures constitute recommended preparatory actions and must be adapted to each organisation's profile:

• to determine whether an entity or group can meet the eligibility criteria for direct supervision; ;
• to map cross-border activities, establishments and services; ;
• improve the quality and traceability of data that may be requested by supervisors; ;
• to harmonise policies and controls across different entities within a group; ;
• clearly document local deviations and their justification; ;
• Testing the effectiveness of KYC, monitoring and escalation devices; ;
• to follow the definitive acts, guidelines, and documents still in draft form separately.