Indirect Supervisory Powers of the New European Anti-Money Laundering Authority

For obliged entities not subject to AMLA's direct supervision, AML/CFT direct supervision will remain primarily at the national level with NCAs retaining full responsibility and accountability. In the meantime, AMLA will have indirect supervisory powers towards these entities to ensure that supervisory actions at national level are consistent and of a high quality across the EU.

Mechanisms of Indirect Supervision in the Financial Sector

Assessments of the State of Supervisory Convergence and Harmonization of Supervisory Practices: To ensure consistent high-level supervisory standards and practices, AMLA will perform periodic assessments of some or all of the activities of one, several, or all financial supervisors, as well as of their tools and resources. To that end, AMLA will develop methods to allow for a consistent assessment of, and comparison between, the financial supervisors reviewed in the same assessment cycle. At the end of each cycle, AMLA will submit its findings to the European Parliament and to the Council, and will have the power to prescribe follow-up measures under the form of guidelines and recommendations for improvement and best practice sharing.

Settlement of Disagreements Between Financial Supervisors in Cross-Border Situations: In case of disagreement between national supervisors, such as cross-border cases or divergent interpretations of AML/CFT requirements affecting the supervisory tasks and responsibilities of the other in relation to an obliged entity not subject to AMLA's direct supervision, AMLA will be entitled to act as a mediator so that these national supervisors can reach an agreement. 

In this respect, AMLA will be able to issue an opinion on how to settle the disagreement and, if conciliation fails, AMLA will have the power to issue binding decisions on the financial supervisors requiring specific actions or the cessation of certain practices to ensure compliance with EU law. 

Monitoring and Addressing Systemic Failures of Supervision: Where AMLA identifies systemic deficiencies or persistent failures in national supervision (e.g., non-application or misapplication of EU or national AML/CFT provisions) affecting multiple obliged entities and undermining the effectiveness of the AML/CFT supervisory system, AMLA will have the authority to launch investigations on a potential breach on its own initiative or upon a well-substantiated request from one or more financial supervisors, the European Parliament, or the European Commission. 

AMLA will then be able, if appropriate, to issue recommendations to the financial supervisor subject to investigation, setting out the necessary remediation actions. If deficiencies are not remedied, the European Commission may issue a formal opinion requiring the financial supervisor to take the necessary actions. 

Coordination of AML/CFT Supervisory Colleges and Information Sharing: AMLA will facilitate the functioning of AML/CFT supervisory colleges established for cross-border groups, ensuring effective cooperation and information exchange among NCAs. Among other prerogatives, AMLA will also be able to establish a supervisory college where such a college has not yet been established even though the conditions for its establishment are met, assist in the organization of joint supervisory plans and joint on or off-site inspections and promote effective and efficient supervisory activities and practices. AMLA will also manage a central AML/CFT database, collecting and analyzing data on supervisory actions, sanctions, and risk assessments, which will support both its own and NCAs' supervisory activities.

Requests to Act in Exceptional Circumstances: In exceptional circumstances following indications of serious, repeated or systematic breaches of AML rules by an obliged entity not subject to its direct supervision, AMLA will have the power to request its national financial supervisor to: (i) investigate such indications; and (ii) consider imposing sanctions on that entity in respect of such breaches. In that context, AMLA also may request the NCA to adopt an individual decision requiring the obliged entity to undertake all necessary actions to comply with its obligations under directly applicable EU law or national law, including the cessation of any practice.

If such a request is not complied with by the national financial supervisor, AMLA will have the possibility to request the European Commission's permission to temporarily directly supervise the relevant obliged entity. 

Indirect Supervision in the Non-Financial Sector

AMLA's indirect supervisory powers will also extend to the non-financial sector, where supervision is often fragmented and delegated to self-regulatory bodies. AMLA will coordinate peer reviews to strengthen consistency and effectiveness in supervisory outcomes, issue recommendations, investigate and address failures by self-regulatory bodies or their overseeing public authorities, and settle disagreements between non-financial supervisors in cross-border situations. AMLA will also facilitate the establishment and operation of AML/CFT supervisory colleges for non-financial obliged entities operating on a cross-border basis.