EU to authorize supervisory role over members’ high-risk AML Compliance


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Threat of EU supervisor in high-risk AML expected to push member states to improve AML Compliance

EU finance ministers agreed last week to authorize an AML enforcement group with the authority to intervene across EU borders

In an effort to harmonize AML rules and enforcement across EU member states and hold members more accountable, the new group will have cross-border authority. Part of the impetus for this more assertive approach lies in the various and embarrassing AML scandals at banks in EU member states.

The EU describes this as “setting up an EU-level supervisor with direct supervisory powers over a selected number of high-risk obliged entities, as well as the authority to take over supervision from a national supervisor in clearly defined and exceptional situations.”

Olaf Scholz, Germany’s Vice Chancellor and Federal Minister of Finance, said his nation places a high priority on fighting money laundering and the financing of terror. “More harmonised rules and EU-level supervision will allow us to be more effective and to strengthen the EU’s anti-money laundering framework,” he said. “It is an important sign that we all stand united for tough anti-money laundering measures.”

The EU action plan for this AML initiative includes the following “pillars”:

  • Ensuring the effective implementation of the existing EU AML/CFT framework;
  • Establishing an EU single rule book on AML/CFT;
  • Bringing about EU level AML/CFT supervision;
  • Establishing a support and cooperation mechanism for FIUs;
  • Enforcing Union-level criminal law provisions and information exchange;
  • Strengthening the international dimension of the EU AML/CFT framework.

The biggest element, according to various observers, lies in the move to authorize an “EU-level supervisor with direct supervisory powers.” This would facilitate the taking over of certain supervision from a member state’s own authorities in certain high-risk situations—a move that would add substantial leverage in bending recalcitrant member states toward more effective AML Compliance.


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