AMLA Finalises Standards for Cross-Border AML Supervision

AMLA recently published its final draft Regulatory Technical Standards (RTS) on home-host supervisory cooperation. The standards establish a common system for information exchange, cross-border inquiries and coordinated supervision of groups operating in more than one EU Member State.

A common approach to cross-border supervision

Businesses operating across several EU countries may be supervised by different national authorities. This can make it difficult for supervisors to share information and maintain a consistent view of a firm’s money laundering and terrorist financing risks. AMLA’s new standards aim to address this by clearly defining the roles of home supervisors, which oversee a group’s main operations, and host supervisors, which supervise its activities in another Member State.

The framework applies to cross-border groups in both the financial and non-financial sectors. It provides supervisors with a shared set of procedures for day-to-day cooperation and communication. One important change is a simplified framework for sharing information between EU supervisors. Under the new approach, supervisors can share information with other EU supervisors without first obtaining consent from the authority that provided it, subject to relevant notification requirements.

The standards also allow home and host supervisors to conduct cross-border inquiries and communicate to coordinate their supervisory activities.

A risk-based approach

AMLA said the framework is designed to be simple, proportionate and efficient.

Supervisors are expected to check information that is already available before requesting additional data. They are also expected to proactively share relevant information where it may help another supervisor assess financial-crime risks. This means supervisory cooperation will increasingly focus on information that is relevant to the actual risk rather than creating unnecessary reporting or information requests.

The standards are part of AMLA’s wider role in creating greater consistency in the EU’s AML/CFT framework. AMLA’s regulatory work includes Regulatory Technical Standards, Implementing Technical Standards and guidelines designed to clarify requirements and support consistent implementation across Member States.

What does this mean for compliance teams?

For financial institutions and other businesses operating across EU borders, the development could mean more consistent supervisory expectations.

Compliance teams should ensure that AML policies, customer-risk information and relevant documentation can be shared effectively across group entities where legally permitted. Firms should also be prepared for closer coordination between national supervisors and more targeted requests for information.

The development is particularly relevant for groups operating in several Member States, where differences in supervisory approaches can make AML compliance more complex.

The standards will become legally binding across EU Member States once adopted by the European Commission.

AMLA’s move therefore marks another step toward a more coordinated EU AML/CFT supervisory system, where national authorities can work more closely and respond to cross-border financial-crime risks with a common approach.