Dr Gábor B. Szabó, TEP
Last Updated: 18 November 2025 | Reading Time: 7 minutes
Executive summary
The Anti-Money Laundering Authority (AMLA) became operational on July 1, 2025, marking the EU’s most ambitious attempt to combat financial crime. With €117-210 billion in illicit funds flowing through European financial systems annually and only 2% of criminal assets ever recovered, the need for change is undeniable. But will a new supranational bureaucracy deliver the paradigm shift the industry desperately needs, or simply add another costly layer to an already broken system? This article examines AMLA’s structure, timeline, and raises critical questions about its approach from an industry perspective.
What is AMLA?
The Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) is a new EU agency established by Regulation (EU) 2024/1620 in summer 2024. Headquartered in Frankfurt’s MesseTurm, AMLA represents a fundamental shift from fragmented national supervision to centralized EU-wide coordination.
Key Facts:
- Operational since: July 1, 2025
- Full supervisory powers: January 1, 2028
- Leadership: Chair Bruna Szego (former Bank of Italy AML head), Executive Director Nicolas Vasse (former ESMA operations head)
- Target staffing: 80+ employees by end-2025, increasing to 400 by 2028, according to recent news
- Direct supervision: ~40 highest-risk financial institutions across the EU
Why AMLA was created: The scale of the problem
The numbers don’t lie
According to EU enforcement statistics, the EU’s current AML system is failing spectacularly:
- €117-210 billion in suspicious transactions flow through EU financial systems annually
- Only 2% of criminal assets are ever frozen or seized
- Money laundering cases increased by 15% in recent years
- 27 different interpretations of EU AML rules create exploitable gaps
Criminals thrive on regulatory arbitrage, moving operations to jurisdictions with weaker enforcement and exploiting inconsistent supervision across member states.
AMLA’s promised solution
AMLA aims to close these gaps through:
- Direct supervision of the 40 highest-risk cross-border financial institutions (banks, insurance firms, asset managers, payment providers, and crypto-asset service providers)
- Indirect supervision coordinating National Competent Authorities (NCAs) through harmonized methodologies
- FIU coordination improving information sharing among Financial Intelligence Units
- Single rulebook creating unified AML/CFT standards across all 27 member states
The transition: What happens to existing authorities?
The European Banking Authority (EBA) transfers its direct AML/CFT mandate to AMLA but continues prudential supervision. On July 3, 2025, the EBA, ESMA, and EIOPA signed a Memorandum of Understanding with AMLA. National Competent Authorities (NCAs) remain primary supervisors for most entities but now operate under AMLA’s coordination in a “hub-and-spokes” model, participating in Joint Supervisory Teams for directly supervised entities.
Implementation timeline: The road to 2028
July 1, 2025: AMLA operational | 2025-2026: Institutional build-up (staff, IT, standards) | July 2027: New single AML rulebook takes effect (harmonized CDD, expanded scope, crypto regulations) | January 1, 2028: Direct supervision begins for ~40 selected entities | Key detail: 5-year grace period for existing customers; new customers subject to new standards immediately in 2027.
Industry perspective: The uncomfortable truth about AML effectiveness
We support the goal, but question the approach
Let’s be absolutely clear: we fully support every effort to combat financial crime. Money laundering, terrorist financing, and sanctions evasion undermine the integrity of our entire sector. Criminals who misuse financial services must be stopped.
However, as financial services professionals on the front lines of AML compliance, we have serious concerns about whether a supranational, super bureaucratic organization can deliver the paradigm shift we desperately need.
The current system: High cost, negligible results
The current AML system is being adopted and used extensively, but the results are negligible:
- Compliance costs have skyrocketed for financial institutions
- Legitimate businesses are choked by compliance burdens while criminals operate with near impunity
- The system drains resources and hinders our competitiveness
- Delivers minimal actual crime prevention despite massive investment
More of the same approach, even if centralized, won’t fix a fundamentally broken model. But this is only the appearance of action.
The wrong players are being asked for the wrong information
Here’s the uncomfortable truth that needs to be said: Financial service providers should not be the primary intelligence gatherers for law enforcement.
We are being asked to:
- Verify identities we have no means to authenticate
- Monitor transactions for patterns we’re not trained to interpret
- Report suspicions based on incomplete information
- Bear the full cost of a system that produces a questionably low success rate
Financial institutions should be partners in enforcement, not unpaid investigators drowning in compliance paperwork. We must put an end to the absurd practice of measuring the success of service providers solely by the number of AML reports they produce and, to the practice of penalizing the low number of reports with fines.
The information AMLA and authorities actually need should come from:
- Law enforcement databases with real-time intelligence
- Tax authorities with comprehensive financial records
- Accurate, government-maintained beneficial ownership registries
- Enhanced cross-border intelligence sharing among FIUs and police
Critical questions the industry needs to answer
As AMLA takes shape, we believe an honest conversation is essential:
1. Is more bureaucracy the answer?
Will adding another supervisory layer solve the problem, or do we need a fundamentally different approach? AMLA creates new coordination mechanisms, but does it address the root causes of AML system failure? Let’s be clear: the AMLA staff will not run after the criminals but us, under the codename “supervision” and “regulation”.
2. Who should be the primary intelligence source?
Should financial institutions continue as the primary source of AML intelligence, or should this responsibility shift to law enforcement, tax authorities, and centralized registries with better access to accurate data?
3. Are we measuring the right outcomes?
Should success be defined by:
- Reports filed and compliance boxes ticked?
- Or actual criminal assets recovered and criminals prosecuted?
The current system optimizes for the former while failing at the latter.
4. Who should bear the cost?
Is it sustainable for a system with a 2% success rate to impose massive compliance burdens on legitimate businesses? Should the cost of financial crime intelligence gathering be borne by private institutions or public authorities?
5. What role for technology?
Can AI, real-time data sharing, and advanced analytics shift the burden from manual compliance to intelligent prevention? Should authorities deploy these technologies centrally rather than expecting thousands of individual institutions to build parallel systems?
How financial institutions must prepare
Regardless of concerns, AMLA is happening. Key preparation steps:
- Gap Analyses: Review AML/CFT frameworks against new requirements (CDD, KYC, UBO). Complete by Q2 2026.
- RegTech Investment: Implement AI-powered monitoring, automated risk scoring, digital identity verification.
- Regulatory Engagement: Participate in EBA/AMLA consultations to voice practical concerns.
- Risk-Based Controls: Enhance measures for crypto-assets, complex structures, high-risk jurisdictions.
- Supervisory Readiness: Prepare for frequent interactions, information requests, and thematic reviews.
Conclusion: Compliance yes, but advocacy too
We will comply with AMLA. We will adapt to the new framework. We will prepare our institutions for 2028.
But we will also continue to advocate loudly for a system that actually works, one that stops criminals without crippling the competitiveness of legitimate businesses.
The fight against financial crime is too important to be lost in bureaucracy. The industry needs to engage constructively but critically with AMLA’s development, pushing for:
- Real-time access to verified data sources rather than asking banks to verify the unverifiable
- Government-maintained accurate registries rather than expecting private institutions to piece together beneficial ownership
- Technology-first solutions deployed by authorities with proper resources
- Accountability for results measured by criminal assets recovered, not compliance reports filed
AMLA represents structural change in EU AML supervision. Whether it delivers meaningful crime prevention or simply adds another costly bureaucratic layer remains to be seen.
The countdown to 2028 has begun. Let’s ensure the conversation about effectiveness continues.
References
1.Regulation (EU) 2024/1620 – AMLA Regulation