Cooperation between AMLA and national supervisors

Background

The establishment of the Authority for Money Laundering and Countering the Financing of Terrorism (“AMLA”) under Regulation (EU) 2024/1620 (“AMLAR”) represents a significant change to the EU AML/CFT framework. AML/CFT supervision will be directly exercised at EU level over 40 high-risk financial sector entities.

From 1 January 2028, AMLA will directly supervise selected obliged entities operating in at least six Member States and assessed as presenting a high risk of ML/TF. The methodology for identifying and selecting these obliged entities is provided in the Regulatory Technical Standards on the risk assessment for the purpose of selection of credit institutions, financial institutions and groups of credit and financial institutions for direct supervision under Article 12(7) of Regulation (EU) 2024/1620 (“RTS on selection”).

Article 15(3) AMLAR requires AMLA to develop Implementing Technical Standards (“ITS”), specifying how AMLA and national financial supervisors cooperate in the context of direct supervision. To this end, AMLA has launched a public consultation on the proposed draft ITS. The consultation closes on 27 January, after which AMLA will finalise its submission to the European Commission.

The draft ITS covers the following areas:

Section 1 – Cooperation between national financial supervisors and AMLA

Section 1 establishes the foundational cooperation framework between AMLA and national financial supervisors. It operationalises the general principles set out in the AMLAR, in particular the duty to cooperate in good faith and the obligation to exchange information in a timely and accurate manner. To support this cooperation, AMLA is required to establish and make available a secured channel enabling information sharing.

Section 2 – Periodic assessment process for the purpose of selection for direct supervision

Section 2 of the ITS establishes a sequential, step-by-step process for selecting obliged entities and allocates responsibilities between national authorities and AMLA.

Identification of provisionally eligible obliged entities

Financial supervisors of the home Member States identify obliged entities that meet the objective cross-border activity criteria (i.e., operation in at least six Member States)1, based on a fixed reference date of 31 December two years before the selection year (“Year X-2”). On this basis:

• Home supervisors collect information from individual institutions (or a parent undertaking in case of groups), to assess whether they operate in at least six Member States, including the home Member State;
• Activities carried under freedom to provide services are taken into account where they meet materiality thresholds as specified in Article 1 of the RTS on selection2, as at 31 December of year X-2;
• Entities meeting the criteria as at 31 December of year X-2 are classified as “provisionally eligible obliged entities” for the purposes of the selection process;
• National financial supervisors transmit to AMLA the list of provisionally eligible obliged entities and the related eligibility information by 30 September one year before the selection year (“Year X-1”).
• AMLA then provides financial supervisors with a list of provisionally eligible obliged entities that are subject to data collection exercise;

On the basis of data collected pursuant Article 4, AMLA verifies that provisionally eligible entities continue to meet the eligibility criteria as of 31 December of year X-1.

Collection of data from provisionally eligible obliged entities

Financial supervisors collect from provisionally eligible obliged entities the necessary data which will be later used by AMLA for the periodic risk assessment. At the same time, financial supervisors of the home Member States collect the eligibility information as on 31 December of year X-1.

Financial supervisors must:

• Complete the data collection no later than 31 March of the selection year (“Year X”);
• Apply validation rules, data quality and plausibility checks, and
• Transmit the data to AMLA no later than 31 of May of year X.

On the basis of this information AMLA performs the periodic risk assessment for year X in accordance with the RTS on selection:

• By 31 July of year X, AMLA informs financial supervisors of the assessment outcomes;
• By 30 September, financial supervisors submit proposals for adjustments to the assessments of the quality of the AML/CFT controls.
• AMLA then shares the outcomes of periodic assessment of all eligible obliged entities with the relevant financial supervisors.

Section 3 – Decisions of the selection of obliged entities

Section 3 sets out the procedural steps for notifying and publicly identifying obliged entities selected for AMLA’s direct supervision, as well as the rights available to selected obliged entities prior to the publication of the final list.

Individual notification

Following completion of the selection process and after informing the financial supervisors, AMLA must, without undue delay, notify each selected obliged entity in writing.

The notification must:

• set out the rights and obligations arising from selection;
• explain how pending supervisory procedures or investigations involving obliged entity are to be taken forward;
• indicate time limits and contact points for submitting technical observations or minor factual corrections and requesting a substantive review of the decision;
• provide clear information on due process rights, including the right to be heard, legal representation, choice of language for communications and submissions and access to the case file;
• refer to the right to seek judicial review

Section 4 – Transfer of supervisory tasks and powers. Mechanism for transferring of supervisory tasks between national authorities and AMLA

Section 4 establishes the framework governing the transfer of supervisory tasks and powers between AMLA and national financial supervisors when an obliged entity is selected for, or removed from, AMLA’s direct supervision. The provisions are intended to ensure that selected obliged entities do not experience supervisory gaps, duplication, or uncertainty as result of a change in competence.

Key elements include:

• Prompt coordination between AMLA and financial supervisors following publication of the list to agree clear timelines for the transfer of supervisory tasks and powers.
• Transfer of a minimum of three years of supervisory information;
• Rules for the handling of pending supervisory procedures or investigations during changes in supervisory competence.

Section 5 – Composition and operation of joint supervisory teams (“JSTs”)

Section 5 sets out the detailed rules governing the establishment, composition and functioning of Joint Supervisory Teams (“JSTs”), which are the operational units through which AMLA will conduct direct supervision of selected obliged entities. In particular, the draft ITS provides that:

One JST is established for each selected obliged entity;

JSTs are composed of staff from AMLA and staff from the national financial supervisors responsible for supervision at Member State level;

• Each JST is coordinated by an AMLA staff member acting as the JST Coordinator;
• The draft ITS include a rotation principle for the JST Coordinator;
• AMLA may assign, renew, or terminate the JST Coordinator’s mandate outside the standard rotation period in duly justified cases, including institutional reorganisation, conflicts of interest, or the need to ensure supervisory continuity.

How we can assist

If your firm is currently reviewing the draft ITS and preparing for the broader AML package reforms, we can help with impact assessments, supervisory readiness, and compliance implementation. Please feel free to contact us if you would like to discuss how we can support your preparations.