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EU picks Frankfurt as Anti-Money Laundering Authority home

Author: ICAEW Insights

Published: 13 Mar 2024

New enforcement body takes step closer to reality as decision-makers select location of headquarters, with mid-2025 launch on the horizon.

EU officials have chosen Frankfurt as the host city for the region’s new Anti-Money Laundering Authority (AMLA). 

In a joint vote between MEPs and EU ambassadors, the city triumphed over competitors Brussels, Rome, Dublin, Madrid, Paris, Vilnius, Riga and Vienna.

AMLA will play a central role in enabling the EU to deliver on an ambitious new package of anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) measures, following a landmark deal between lawmakers announced in January

All rules that apply to companies will be enforced under a ‘single-rulebook’ regulation. Meanwhile, the sixth Anti-Money Laundering Directive will require member states to set up a host of new AML and CFT systems and mandate them in their own national laws.

Final stone

In its pitch to the decision-makers, Frankfurt’s bidding team said the city is home to more than 40 research institutions and universities in the technology field. With cyber activity a key area of AML concern, Boris Rhein, Minister-President of Frankfurt’s home state Hesse, said that as the home of the European Central Bank, Frankfurt offers access to a “dense network of supervisory expertise”. In addition, it has proximity to a “wide variety of credit institutions”, from regional banks to global players.

Belgian Permanent Representative Willem van de Voorde described the selection of the AMLA’s seat as “the final stone of a much bigger construction”. With both direct and indirect supervisory powers, the AMLA will be instrumental in strengthening the EU’s AML framework, he said. Scheduled to launch in the middle of next year, the agency will have more than 400 staff.

“Today is not only about the choice of a city; above all, it’s a significant step forward in the fight against financial crime,” van de Voorde said as the selection was announced. “The AMLA will be a powerful tool in ensuring the integrity of the European financial system and protecting our citizens from the harmful impacts of money laundering and terrorist financing.

“Moving forward, we will have to formally adopt the legislative texts and then focus on ensuring a smooth and successful launch of the AMLA in Frankfurt, which I’m sure will be a force for good in the years to come,” he added.

Important step

European Commissioner for Financial Stability, Financial Services and Capital Markets Mairead McGuinness praised the EU Parliament’s strong process of public hearings in the run up to the vote, which allowed each pitch to be considered.

“We celebrate and mark the significance of that – but also the start of another journey in relation to tackling money laundering and terrorism financing.

“We have a taskforce ready to go to set up the framework that will allow AMLA to begin its job, as has been outlined by the Council – because we want and need to have trust in the financial system. We also want to root out illegal activities that fund money laundering and allow to prevail crimes against society, families, children and women. So, this is an important step for the EU.”

Hailing the “institutional revolution” of a new EU authority based in Frankfurt, McGuinness stressed that the AMLA would work “at the very heart of our system of supervision”. It will work closely with member states’ Financial Intelligence Units, enabling cooperation and the exchange of information – plus joint analysis of suspicious transactions.

McGuinness said the AMLA will help national supervisory authorities to support each other and work together. “And we will have more consistent supervision across the EU because the authority will also undertake some direct supervision of the highest-risk financial sectors, or other entities that operate across member states. And it will be able to take over the supervision of any entity, where circumstances require.”

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