In a significant step toward overhauling Europe’s defences against dirty money, the European Banking Authority (EBA) has issued a comprehensive response to the European Commission’s request for expert guidance on the design of the bloc’s upcoming anti-money laundering and counter-terrorist financing (AML/CFT) rules.
The recommendations outline how key components of the EU’s new framework should operate once the long-planned Anti-Money Laundering Authority (AMLA) begins work, signalling a risk-based approach intended to make supervision both stricter and more efficient.
Clear roadmap toward AMLA’s launch
The advice follows a Commission call issued in March 2024, asking the EBA to help define six core regulatory mandates that AMLA will eventually take over. These cover how risks are assessed, how customer checks are carried out, and how breaches should be sanctioned. Together, they form the backbone of the supervisory system that AMLA will run when it becomes fully operational.
Among the recommendations are proposed regulatory technical standards (RTS) on:
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the methodology national supervisors should use to assess inherent and residual ML/TF risks in obliged entities;
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how AMLA should determine which financial institutions warrant direct supervision;
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what information firms must collect during customer due diligence;
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how breaches of EU AML rules should be categorised by severity, and what criteria authorities should apply when imposing fines or other measures;
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preparatory elements for future rules on group-wide information exchange and the calculation of base amounts for financial penalties.
Risk-based, proportionate — and “operationally sound”
The EBA emphasised that, where legally possible, it followed a proportionate model intended to deliver “effective and efficient” outcomes. The recommendations were developed using extensive consultation with stakeholders and national authorities, reflecting concerns that any EU-level regime must be feasible to implement across a diverse financial sector while still raising supervisory standards.
Once officially adopted by AMLA and endorsed by the Commission, the standards will serve as the legal and operational foundation of Europe’s new supervisory architecture. Policymakers aim to ensure that AMLA is equipped from day one with consistent tools to identify risky institutions, enforce uniform rules, and intervene when national supervision proves inadequate.
Transfer of responsibilities in 2025
Currently, the EBA holds the legal mandate to help EU institutions prevent the misuse of the financial system for money-laundering or terrorist-financing purposes. This responsibility will shift to AMLA at the end of 2025, marking a major institutional transition in Europe’s fight against financial crime.
The EBA will, however, remain active in addressing financial crime from a prudential supervisory perspective, working closely with the new authority to ensure continued coordination between prudential regulation and AML oversight.
A pivotal step in Europe’s AML transformation
The establishment of AMLA — widely viewed as the EU’s most ambitious reform in this area for a decade — follows years of high-profile scandals involving European banks and concerns over fragmented national enforcement. With a central authority set to supervise high-risk financial institutions directly, Brussels hopes to close longstanding gaps that allowed criminal networks, sanctions evaders and corrupt officials to exploit cross-border vulnerabilities.
While several regulatory elements still require political approval and legal adoption, today’s publication signals tangible progress in the EU’s plan to operationalise AMLA, underscoring Europe’s broader drive toward harmonised supervision and stronger financial-crime deterrence across the bloc.
For more details, refer to the attached PDF.
By FCCT Editorial Team
