News

Officials at the EU’s nascent anti-money laundering regulatory agency have begun meeting regularly with national supervisors to preemptively address any problems arising from the forthcoming overhaul of the bloc’s supervisory architecture.

The Frankfurt-based AML Authority, or AMLA, will set uniform standards for compliance and supervision across the bloc, serve as a data-sharing hub for national financial intelligence units, and from 2028 onwards directly oversee 40 of the EU’s riskiest financial institutions as measured by their systemic importance and exposure to illicit finance.

All signs indicate that the 27 countries that comprise the EU will rubberstamp the appointment of veteran Italian central banker Bruna Szego as AMLA’s first chair on Tuesday, after which the agency will embark on a hiring campaign that could see considerable numbers of national officials resign their current positions and relocate to Frankfurt.

The European Banking Authority, or EBA, whose AML duties will fall to AMLA, launched a new forum to oversee the transition with national regulators, who have already begun meeting with the European Commission, the EU’s executive branch, to discuss the agency’s potential impact on their staffing number and any training they may need going forward.

AMLA, which is negotiating to lease office space in the 63-story MesseTurm, one of Frankfurt’s most iconic skyscrapers, plans to start with an initial headcount of 80 employees this year and hire an additional 352 personnel by the end of 2027, before the agency’s direct supervisory role commences.

The agency has hundreds of available positions at all levels of seniority, including posts that officials now working for the European Central Bank and other EU-level agencies will probably fill, and other posts for data scientists, attorneys and communications specialists drawn from the private sector.

A spokesperson for AMLA confirmed the agency’s intent to recruit the “brightest and best talent,” but brushed aside concerns that the plan could precipitate a “brain drain” at the national level.

“Given the periodical growth that AMLA will go through and the fact that not all staff will be AML subject matter experts … the risk of a quick and radical brain drain is less severe than sometimes feared,” the spokesperson told ACAMS moneylaundering.com. “We will open our first recruitment wave towards the end of January.”

AMLA will also hire 32 “seconded national experts,” including a mandatory one employee from each of the bloc’s 27 national FIUs. Regulators will not be required to second any employees to AMLA, though there is little they can do to stop them from applying.

One senior official already on her way to Frankfurt is Janneke de Smet-Dierckx, a veteran attorney with the Dutch Public Prosecution Service who will play a key role in getting the agency up and running.

“With more than 30 years of experience in fighting financial crime and criminal money flows, including 15 years in the private sector and 15 years in the public sector, this is a wonderful next step,” de Smet-Dierckx posted last month on social media.

Pressure

Brain drain or not, AMLA’s arrival on the scene will require representatives of national regulators and FIUs to spend considerable time meeting with counterparts at the new agency, participating in committees and contributing, for example, to the development of common due-diligence standards across the bloc.

Those new demands will consume a substantial share of their resources and prove especially challenging for small nations, as well as for nations with only a small pool of talent from which to draw.

A source familiar with the matter said that national supervisors have learned from the experience of the EU’s Single Supervisory Mechanism, or SSM, a system of banking supervision launched in November 2014 that combined prudential supervision by the European Central Bank with national oversight.

Under the SSM, the ECB directly oversees the 114 largest banks in the bloc through “joint supervisory teams” also staffed with personnel from national regulators.

Many national regulators are now bolstering their ranks with dozens of new employees in anticipation of the added workload AMLA will bring and the potential departure or secondment of staff to Frankfurt.

But a national official in Northern Europe told moneylaundering.com on condition of anonymity that smaller nations lack the resources to embark on major hiring sprees and will have no choice but to pull staff from their regular duties to fulfill AMLA-related tasks.

The additional workload introduced by the SSM a decade ago “was unbearable at times,” the official said. “We’re holding our breath and trying our best to understand what’s coming our way.”

AMLA’s general board, which consists of representatives of national regulators and FIUs from the bloc’s 27 member states, will meet for the first time in the weeks after the EU confirms Szego’s appointment as chair of the new bloc-wide agency.

Nicolas Veron, an analyst at the Bruegel policy center in Brussels, told moneylaundering.com that “some element of competition” for talent will emerge between AMLA and national authorities, but the “extraordinary heterogeneity” of the staff the new agency requires will mitigate any impact on the latter.

“People will [move to AMLA] and come back to member states and take leadership positions in national authorities and you’d end up with a more cohesive community, which is the whole point of the reforms in a way,” said Veron, who also works as a senior fellow at the Peterson Institute for International Economics in Washington, D.C. “It’s not a zero-sum game.”

Contact Koos Couvée at kcouvee@acams.org