EBA could lose anti-money laundering duties as new EU AML authority is proposed

Chairman of European Banking Authority Roberto Gualtieri and Jose Manuel Campa, the Spanish candidate to chair the European Banking Authority | Olivier Hoslet/EPA-EPE

Last Updated on Thursday, 8 July, 2021 at 10:33 am by Andre Camilleri

The European Banking Authority is set to be stripped of all its anti-money laundering duties, which will be handed over to a new EU anti-money laundering watchdog, according to proposals seen by POLITICO.

The news portal reports that the plans are set to be published by the European Commission on 20 July.

The move is set to repair the reputational damage caused by scandals in several Member States, including Malta, which revaled a blind spot in banking supervision.

POLITICO said that the move to create a new AML authority comes amid concerns over the independence of the EBA’s board after the Paris-based agency failed to hold national regulators accountable for sleeping on the job.

The authority will have direct supervisory powers over financial companies across the bloc, with the power to impose fines totaling millions of euros.

The board of the new agency will be independent from EU countries.

Around 1% of European wealth is involved in “suspect activity,” the equivalent of around €160 billion, POLITICO said.

According to the proposals, there would be a single rulebook that the new authority will enforce to police uniform rules on customer checks, cash limits and reporting requirements across the bloc.

Another proposal would see an improvement in the coordination between national financial intelligence units.

The agency could begin direct supervision in 2026, after lengthy negotiations between the European Parliament and the European Council are concluded.

The decision to create a new agency is considered as a blow to the EBA, which was recently beefed up in terms of funds and manpower in the wake of scandals in Denmark, Estonia, Germany, Latvia, Malta, the Netherlands and Sweden.

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