The ever-evolving financial and regulatory landscape inevitably results in money laundering and terrorism financing (ML/FT) techniques becoming more elaborate and harder to detect. Perpetrators are moving away from traditional methods – such as the use of cash and shell companies – to digital tools and decentralised platforms like crypto assets and AI to facilitate discreet and illegitimate monetary transactions.
Regulation (EU) 2024/1624 (AMLR) reflects the EU’s resolve to address long-standing compliance and enforcement challenges, which have previously hindered AML/CFT efforts. The consolidation and streamlining of the regulatory framework aim to create a more coherent and resilient system capable of responding to these evolving threats.
This legislative package introduces a harmonised AML Single Rulebook, the 6th Anti-Money Laundering Directive, and establishes a central authority – the Anti-Money Laundering Authority (AMLA) – to oversee implementation. The recent publication of AMLA’s inaugural Work Programme (the “Programme”) is another milestone in this reform. A quick glimpse at its outlined priorities and early actions evidences the EU’s ambition in translating its AML/CFT vision to effective operational delivery.
As per its mandate, up to 40 obliged entities – primarily banks and financial institutions operating across at least 6 EU Member States – will be selected for supervision, based on their residual ML/FT risk and geographic footprint. Such direct supervision will take place in close collaboration with respective national competent authorities using joint plans, information-sharing protocols, and dispute resolution mechanisms.
AMLA will also apply a centralised database to support risk-based oversight by integrating risk profiles, enforcement actions, and suspicious transaction patterns. It will also coordinate cross-border supervision through “colleges of supervisors”, focusing on high-risk sectors, with particular emphasis being placed on the substantial ML/FT risk posed by crypto-asset service providers (CASPs).
AMLA has acknowledged the unique vulnerabilities posed by CASPs, including the crypto sector’s technological complexity and cross-border nature, which have challenged national supervisory frameworks. In light of this, AMLA will begin laying the groundwork for a harmonised supervisory approach, integrating both the obligations under the Markets in Crypto-Assets (MiCA) Regulation and the broader EU AML framework. Alongside the centralised database described above, this would also include the development of tailored supervisory methodologies, both of which would support better information sharing practices and support cross-border risk analysis.
What does this mean for you?
The message emanating from the Programme is clear: all obliged entities should prepare for what may be a new level of scrutiny and regulatory expectation. In particular, focus should be placed on proactive assessments and subsequent improvement of entities’ AML/CFT frameworks so as to meet the expectations imposed under both MiCA and the EU AML regime. PwC Malta may assist you in achieving this in the following ways:
Conducting comprehensive risk assessments – Reviewing your exposure to ML/TF risks, namely by conducting business-wide, customer and jurisdictional risk assessments;
Strengthening AML governance frameworks and internal controls – Ensuring effective oversight at board level and adopting well-documented AML/CFT policies and procedures;
Conducting tailored training sessions/e-learns – Aimed towards relevant employees, ensuring that staff can respond effectively to ML/FT risks;
Carrying out AML health checks and audits – Assessing your AML/CFT framework’s effectiveness and enhancing the same. Any findings may be measured against the expectations outlined in the AMLA programme to ensure effective regulatory compliance.
This article was written by Justine Xuereb and Parameshwaree Chellen.
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