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16 July 2021, 11:46

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In reaction to several AML and dirty money breaches by the Financial Sector

What does AML mean?

Also known as Anti money laundering, this refers to processes, actions, laws and compliance regulations that are designed to make it harder for criminals to profit from crime.

Current estimates are that roughly only 1% of all laundered money is detected. This is a Global problem and allows people to profit from organised crime, human trafficking and weapons smuggling.

Money laundering Categories




What is the EU AMLA Proposal:

If the legislation goes forward the new European AML authority will have a regulatory role. The AMLA would set up operations in 2024 and gain the ability to supervise some cross-border financial companies and impose fines on firms that breach money-laundering rules in 2026.

The authority will be the direct supervisor of certain financial sector entities which operate cross border and in the highest risk category.

Money laundering, terrorist financing and organised crime remain significant problems which should be addressed at Union level

The documents seen by Reuters said



Summary of the AMLA:

The new Anti-money Laundering agency has been created due to the recent compliance breaches in AML and CTF in the EU. This is in direct relation in the wake  of several bank scandals before the pandemic. The proposal said EU states will have to harmonise anti-money laundering laws for the project to work.




AMLA governance over compliance:

EU AML rules will be made directly binding on member states to stop criminals exploiting differences between national regulators, the documents said.

The proposals includes a single rulebook that the new watchdog would enforce (AMLA), will govern over a uniform rules surrounding.

EU AMLA Governance

There’s also an initiative to improve the coordination among financial intelligence units, the national hubs that analyse reports by banks and other companies on countering suspicious activities.




Reasoning behind the AMLA :

Since 2020, the EU has seen numerous breaches in the compliance surrounding AML and Financial Crime. And as a response the FATF has been forced to implement stronger governance over these issues.

However we have seen recent scandals in :

  • Malta
  • Netherlands
  • Sweden

The proposal will also see the European Banking Authority of all its anti-money laundering duties and hand them to a new EU anti-money laundering watchdog.




THE EU AMLA and the UK:

The new EU AMLA will be dedicated to work independently of member states’ national authorities, giving it greater power to identify and act upon significant money laundering threats.

It will also have the ability to fine businesses in breach of regulations up to ten per cent of turnover, and it will be looking at risks from non-EU countries such as the UK.

The need to combat the problem of AML and CTF is global, and in order for the UK to continue to grow as a Fintech and Regtech Hub it will have to work with and comply with the following AMLA advancements.

Simon Dix, Founder, DX Compliance

However, Brexit results in the fact that the UK’s anti-money laundering laws are no longer governed by the European Union (EU), but that does not mean that the UK will not have to comply with the new regulations.

It is more than likely the UK will adapt and follow the AMLA governance




The FATF and the EU:

The Financial Action Task Force or the FATF is an inter-governmental decision making body. It was created in 1989 during the G7 Summit in Paris in response to the global concern over money laundering. Its current president is Marcus Pleyer as of the 1st of July 2020.

The policy body works towards bringing about a global legislative and regulatory revolution to money laundering. Additionally, since the occurrence of rising international terrorism such as 9/11 terror attacks in USA, the FATF has expanded to include such actions of terror finance under its governance. 

To know more about AML and the preventative services available, click the link to see how DX Compliance Solutions can help Your Industry. 


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