What Does the EU’s AMLA Mean for Family Offices, AFMs, and Crypto Firms?
Europe is stepping up its anti-money laundering drive in July 2025 with the launch of unitary regulations to tackle financial crime.
What Is the EU’s AMLA?
The European Union has a long history of taking action to reduce the financial system’s use by criminals, passing its first anti-money laundering (AML) directive in 1991. The directive has been revamped and strengthened on multiple occasions in the decades since, but the latest iteration marks a major expansion of institutions and powers to deal with AML and combating the financing of terrorism issues. The European Commission first proposed its AML Reform Package in 2021, with the aim of improving the detection of suspicious transactions and closing loopholes which enabled the proceeds of crime or terrorist funding to flow through the financial system. The reform package, finally passed by the European Parliament, consists of several parts: a new regulation (AMLR), a new Directive (AMLD) and a new Authority (AMLA) which will combine to form a new system of AML/CFT supervision which will allow information sharing over important issues like beneficial ownership information, and high risk entities.The AMLR replaces most of the existing European anti money laundering rules and will apply directly to all EU member states, without their countries parliaments changing the laws (national transposition). In July 2025, the European Union’s Anti Money Laundering Authority (AMLA) goes live, marking a key step in strengthening the trading blocs’ law enforcement agencies powers against illicit uses of the financial system.The AMLA will be set up as a decentralised EU regulatory agency which will streamline ALM oversight, instead of the current seven European institutions, seven EU bodies, and over thirty decentralised agencies spread across the EU.
What Is the Purpose of the AMLA?
The latest iteration of the European Unions’ AML directive has two main parts. The is involves the setting up the Anti Money Laundering Authority (AMLA) which will provide a focal point for trading bloc's anti money laundering efforts, while supporting member state’s Financial Intelligence Units (FIUs) in providing joint analyses.The second part involves AMLA creating a brand new AML rule book and enforcing this across the EU’s member states. The European AMLA is completely separate from the United States Anti Money Laundering Act which shares the same acronym as the new EU anti-money laundering authority, as do AML/CFT and AMLC by national authorities in Malaysia and the Philippines. AMLA is tasked with creating a whole new AML/CFT rulebook which will involve harmonising rules on key issues such as beneficial ownership registers, customer due diligence, and AML and counter terrorist financing (AML/CFT) governance across the EU. “The creation of AMLA is a significant step in the right direction to confront the challenges we face, today and tomorrow. It presents a unique opportunity to grasp the nettle of regulatory fragmentation and eliminate the weak points in the current European AML Framework,” said Ms Derville Rowland, Deputy Governor of the Central Bank of Ireland, speaking at an anti-financial crime summit in Dublin in 2024.What Crimes Will AMLA Investigate?
The AMLA will be the EU anti-money laundering authority and have oversight over credit and financial institutions that operate in six or more EU countries, which will also cover cross-border activity. “A key point to note about the new legislation is that for the first time the EU’s AML/CFT regime is being partly prescribed by regulations which are directly applicable in Member States. In addition, the European Union has never before had a dedicated AML/CFT authority,” said law firm Norton Rose in a 2024 research note.What Was Wrong with the Existing EU AML Regime?
According to the European Commission, which steers European legislation onto the statute book, the previous iteration was hampered because it took the form of a directive which required transposition into national law and this fragmentation caused problems for law enforcement agencies.“This often leads to delays in implementation and divergence in national rules, resulting in fragmented approaches across the EU. In addition, the current regime is not detailed or granular enough, which means there is not enough convergence. Finally, there is no central coordination body at the EU level, which hinders cooperation between national supervisors and Financial Intelligence Units (FIUs), which is essential for a fully effective regime,” the Commission said in a 2024 explanatory note on the new regime.What Does AMLA Mean for AIFs?
Alternative fund managers' focus on professional investors has meant the sector has escaped the level of regulatory oversight by their retail facing peers in the UCITs fund sector.Data from the European securities regulator shows that alternative fund managers have an average net asset value of €200m; it is unlikely that any will be one of the forty financial institutions that AMLA directly supervises. Likewise, given that typically AIFs are located in a single jurisdiction they are also unlikely to trigger cross border oversight from AMLA given that the EU body will only look at entities which are active in six or more countries.But it would be a huge mistake for AFMS to think AMLA, and the AML regulations it is drawing up will not apply to them given the ratcheting up of AML risks faced by the sector. A 2024 study by AFM service provider Ocorian polled senior figures, which collectively managed an AUM of over $130bn, and found that almost three quarters (73%) have seen AML risks rise over the preceding two years. While a substantial cohort of respondents (16%) reported ‘a dramatic’ increase, over this period - against only 7% saying that AML issues were declining at their fund. The heightened risk posed by AML/CFT rule breeches was highlighted by nearly three quarters of respondents (70%) telling Ocorian they had been subject to some form of regulatory sanction linked to rule breaches over the preceding 24 months. “In response to these growing risks and the current level of fines they are already facing, almost nine in ten (87%) say that their organisation’s focus on AML management will increase over the next 24 months. Of these, almost a quarter (24%) say it will increase dramatically. Only 12% say it will stay the same,” Ocorian said. How Can AFMs Comply with AMLA Regulations?Following a 2023 survey of domestic UCITs funds and AFMs the Dutch markets regulator the Authority for Financial Markets (Autoriteit Financiële Markten) made a number of recommendations to the AIF sector, according to law firm Osbourne Clarke. These included: taking stricter measures when it comes to transaction monitoring, increasing compliance training, ensuring they are monitoring all available lists of individuals, or foreign banks, which are subject to sanction. “As shown by the survey results, it is essential that fund managers at all times remain aware of their AML and sanctions compliance obligations,” Osbourne Clarke said.How Can AFMs Comply with AMLA Regulations?What Does AMLA Mean for Family Offices?
Historically, banks and financial institutions have been the locus of Anti-money laundering and counter-terrorist financing (AML/CFT) regulation. However, this has gradually expanded over time as authorities have intensified their effort to combat financial crimes.The EU’s latest batch of AML regulations has expanded to include professions such as accountants, real estate agents and developers, notaries, lawyers, and family offices.While family offices won’t - like their AFM peers - be supervised by the anti-money laundering authority directly, they will need to comply with the rule book it creates. Obliged entities under the AML Act includes almost all financial institutions, including alternative fund managers, as well as an extensive list of non-financial entities and operators such as casinos, lawyers, accountants, and real estate agents.These obliged entities will be required to flag high-risk transactions, take part in joint analyses, and provide beneficial ownership information to national authorities as part of the information sharing process that the European Parliament intended would happen as it passed.“Family offices, accountants, real estate agents and developers, notaries and lawyers are excluded from [AMLA’s] supervisory remit. However, AMLA will have the ability to issue non-binding guidelines for those professions that may not necessarily align with the ones issued by [national] Supervisors and may result in alterations to the existing AML policies and procedures,” the Luxembourg Office of law firm Dentons said in a 2024 research note.What Does AMLA Mean for Crypto Firms?
Because of AMLAs remit to monitor financial institutions which are active in more than six EU member states, it will only be the large crypto asset service providers which could be subject to direct supervision by the new AML. This group of firms would need to ensure that their anti-money laundering practices and procedures comply with EU rules, the most high profile - and contentious of which - has been the travel rule - better known as the Transfer of Funds Regulation (TFR). TFR brings traceability to EU crypto transactions, and firms which don’t comply will be held to account by the EU’s latest regulatory body, and according to crypto platform PrimeXBT, it's the most important aspect of the AML act for digital asset firms. “Perhaps the most notable new rule will be that crypto service providers will be obliged to make crypto asset transfers traceable. This will be achieved by collecting and making accessible certain information about the sender and beneficiary of transfers, enabling the EU to identify and block any suspicious transactions,” Kathryn Davies, a Market Analyst at PrimeXBT Market says.Frequently Asked Questions about AMLA in the EU
The acronym AMLA appears in multiple forms in the context of anti-money laundering - So far it has been used in two main ways; as the acronym for anti-money laundering legislation. The term first emerged in Asia in the early noughties when both the Philippines and Malaysia used the acronym as shorthand for their inaugural anti money laundering and counter terrorism financing (AML/CFT) legislation. The term came into widespread use when US legislators introduced the Anti-Money Laundering Act of 2020.The EU’s use of the designation for the body it will use to supervise anti money laundering activities in the trading bloc is the first time it has been used to designate an organisation and not a piece of legislation.
The term AMLA was first coined in the Philippines, which passed the Anti-Money Laundering Act (AMLA), as a Republic Act number. 9160 in 2001, and is the country’s primary legal weapon in the financial crimes enforcement network.Despite this set of AML regulations, the archipelagic nation remains a high risk location, as evidenced by the 2016 raid on the Bangladesh Central Bank when North Korean hackers made off with over $80m, which was then laundered through casinos in the Philippines before being offloaded to foreign banks.
The Philippines has amended the AMLA multiple times to broaden its scope and strengthen its enforcement approach, with the latest version brought onto the statute book in 2021.What are the penalties for breaching the Philippines AMLA legislation?The penalties for non-compliance with the Philippines AMLA are can be severe and include: fines for company directors and officers in breach can be as high as Php1m ($17,000), and up to seven years in prison.Philippine financial institutions in breach of AMLA can lose their banking licences.
AMLA was the acronym used by United States legislators to introduce the Anti-Money Laundering Act of 2020 which represented the most sweeping overhaul of American AML regulations since the Patriot Act passed in the wake of the 9/11 terrorist attacks. The AMLA amends and expands upon the Bank Secrecy Act 1970, the primary anti-money laundering law in the US, broadening its scope for federal agencies to combat financial crime and terrorist financing. The Bank Secrecy Act and the AMLA are administered by FinCEN.
Published February 26, 2025. Sources checked February 1, 2025.Author:
Aaron Woolner is a financial journalist with over a decade of experience covering banking, insurance, fintech, and regulatory topics. Having led editorial teams at prominent publications like Capital.com and Asia Risk, Aaron delivers informed and compelling insights from across Asia and Europe.Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
Aaron Woolner is a financial journalist with over a decade of experience covering banking, insurance, fintech, and regulatory topics. Having led editorial teams at prominent publications like Capital.com and Asia Risk, Aaron delivers informed and compelling insights from across Asia and Europe.Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
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