AML: Overview of the EU’s New AML Framework

This week European Union officially launched Frankfurt based Anti-Money Laundering Authority (AMLA), which will serve as a centralised regional hub to combat money laundering and terrorist financing. For more information, please visit the website of the European Union.

Headquartered in Frankfurt, AMLA will take over from the European Banking Authority (EBA) in 2026. In order to ensure a smooth transition, the EBA will continue to lead AML/CFT activities until its handover to AMLA at the end of 2025. As part of this process the European Banking Authority will develop methodologies for supervision, risk assessment, customer due diligence and breach criteria, providing a progress report to the European Commission by October 2025.

Comprehensive Legislative Package

The newly adopted EU package includes four legislative initiatives:

1. A Regulation establishing the EU Anti-Money Laundering and Counter-Terrorist Financing Authority (AMLA).

2. A new Regulation focusing on Anti-Money Laundering and Counter-Terrorist Financing (AMLR/the Regulation).

3. The sixth Anti-Money Laundering and Counter-Terrorist Financing Directive (AMLD6).

4. An updated version of the 2015 Regulation on Transfers of Funds (Regulation 2015/847/EU).

Responsibilities of AMLA

• AMLA, in collaboration with national supervisory authorities, will conduct regular assessments of credit and financial institutions operating in at least six Member States. If AMLA deems the risk profile of these entities as high, it will supervise them directly or indirectly with national supervisors.

• AMLA will have the authority to issue binding decisions to specific obliged entities and impose administrative and pecuniary sanctions for non-compliance. Its actions in imposing penalties will be subject to judicial review by the Court of Justice of the European Union.

• AMLA will coordinate national supervisory authorities’ approaches to AML/CFT issues and issue guidelines concerning their operations.

AMLR (Anti-Money Laundering Regulation)

The AMLR represents a drive towards harmonisation of AML/CFT requirements and standards across the EU Member States and introduces several new obligations, namely:

• Regular employee assessments for AML/CFT compliance.

• Group-wide implementation of AML and counter-terrorism financing measures by parent companies, covering subsidiaries worldwide, with specific exceptions to be detailed by AMLA by July 10, 2026.

• New rules governing outsourcing contracts to ensure AML/CFT standards compliance.

• Regulation of due diligence in cash transactions and establishment of Know Your Customer (KYC) procedures.

• Measures to limit business relationships with high-risk third countries.

• Prohibitions on correspondent relationships with shell institutions and special obligations for crypto-asset service providers.

• Establishment of a legal framework for information exchange among obliged institutions, particularly for customer due diligence purposes.

• Specification of document retention periods for AML/CFT-related documents.

• Mandatory cooperation with Financial Intelligence Units (FIUs) and reporting of suspicions related to money laundering or terrorist financing.

• Requirements for reporting suspicious transactions to FIUs, which must confirm their legitimacy before processing.

AMLD 6 (Sixth Anti-Money Laundering Directive)

AMLD 6 expands the scope of Member States’ obligations:

• Extending AML Regulations: Member States can apply AML regulations to specific high-risk sectors. The list of obliged entities in the AMLR is not exhaustive.

• Regulation of Golden Visas and Passports: Member States must regulate golden visas and passports and enhance security measures for applicants.

• Statistics and Registers: Member States must maintain and publish AML/CFT-related statistics and keep a central register of accounts, including those identified by IBAN, virtual IBAN, securities accounts, and crypto-asset accounts.

The new regulatory framework and its obligations will be gradually implemented, with some measures, particularly those concerning crypto-assets, taking effect by the end of 2024. Full implementation of all the provisions is expected by mid-2027. Financial institutions and other obliged entities are encouraged to review and adjust their AML/CFT frameworks to ensure compliance with the new regulations.

cleversoft Compliance Commitment

Based on the comprehensive overview of the EU’s new Anti-Money Laundering (AML) framework, cleversoft is strategically positioned to monitor and ensure our products are updated to reflect these new requirements. The establishment of the Anti-Money Laundering Authority (AMLA) and the accompanying legislative package underscore a pivotal shift towards stricter compliance standards across EU Member States.

We are committed to integrating robust monitoring mechanisms that track regulatory changes under the AMLR and AMLD 6 frameworks. This proactive stance ensures that our solutions not only comply with but exceed the evolving AML/CFT requirements.

If you’d like more information about our Financial Crime Prevention Services, please visit our website and feel free to reach out to our dedicated Sales team via the contact form on our website.