.svg)
On Thursday (February 22) last week, the EU selected Frankfurt as the seat for the new Anti-Money Laundering Authority (AMLA), with all signs pointing to a powerful new regulator.
“I hope that in time we will look back and see the significance of putting our house in order by putting in place really strong rules, a new authority,” said Mairead McGuinness, the European Commission’s financial services commissioner, during a press conference on Thursday evening.
“Now, we just have to implement.”
The new AMLA has garnered considerable excitement in Brussels and further afield already and despite a three-year process establishing which country would host the authority, the end result came smoothly, with McGuinness even wryly saying to attending journalists: “I'm sure you're glad we weren't later.”
“Frankfurt being selected to host AMLA is reinforcing its status as a central player in Europe's financial sector,” said Jesper Kristensen, managing director at VILUAN Consulting.
Kristensen explained that Frankfurt’s selection is a strategic move for the EU. “It promises to leverage the city's financial expertise and infrastructure to bolster AMLA's mission to protect the financial system's integrity.”
“Frankfurt's selection as the location for the EU's new anti-money laundering authority reflects the city's importance as a financial hub within the European Union,” agreed Antonio Lanotte, Italy’s Global Blockchain Business Council ambassador.
Lanotte continued that the selection of Frankfurt as the preferred city to host the EU's anti-money laundering authority, with Paris as the runner-up, underscores the strategic importance of these cities within the European financial landscape.
“The proximity to institutions like the European Central Bank and connections with Brussels likely played significant roles in this decision, as close coordination between regulatory bodies and financial institutions is crucial for effective anti-money laundering efforts.”
According to the Italian lawyer, this choice highlights the EU's commitment to strengthening its regulatory framework and combating financial crimes across member states.
Marco D’Oro, business development manager at SGR Compliance, agreed that Frankfurt’s proximity to institutions such as the European Central Bank (ECB) is beneficial.
“Its central role will certainly have the duty of further underlining the interaction among member states in identifying possible transnational risks, communication between financial intelligence units, and the unification not only of regulatory models but also the unified adaptation of tools, to close the technological gap that often favours the always emerging new methods of circumventing control models,” he said.
The choice, however, will no doubt surprise some.
As previously reported by Vixio, it was anticipated that Madrid or Vienna would seize the day, with both having impressed during the joint public hearing held earlier this month.
However, as Kristensen pointed out, Frankfurt has its clear advantages, even if it was perceived to come up short at the public hearing.
“It has its strategic financial position, a talent-rich environment and an established education and research sector providing robust training opportunities,” he pointed out.
“Frankfurt's integration with EU financial bodies, its commitment to addressing financial risks, and international accessibility further cement its suitability.”
Will it be effective?
These are the words on everyone’s lips, with McGuinness going as far to describe the EU’s AMLA as “an institutional revolution”.
In times that have seen the EU grapple with scandals such as that of Denmark’s Danske Bank and Latvia’s ABLV, as well as criticisms that its rounds of sanctions since Russia’s invasion of Ukraine are proving ineffective, the agency needs to work if it is going to enhance the trading bloc’s reputation.
"The jury is still out on how effective AMLA will be,” said Jerome Dickinson, founder of avroytech, a legal company focusing on crypto and payments.
“Often, when the EU creates new agencies and bodies, they can quickly be perceived, rightly or wrongly, as toothless tigers,” he suggested.
Brussels-based Dickinson continued that this is notably because of political wrangling between the European Commission and member states, which can mean initial proposals get watered down.
“But with AMLA, the momentum seems very much towards it becoming a powerful body,” he said. “Time will tell."
