The ECB also raised concerns regarding independence since joint supervisory teams will no longer be coordinated from within the bank but will instead be based in the country where the supervised entity is headquartered.

Legal expert commentary

“Surely the point of setting up a new regulator is to make sure it has more resources, closer cooperation with other financial intelligence units and regulators, and the necessary remit to do the job properly,” said John Binns, partner at law firm BCL Solicitors. “It sounds like this is a regulator that is set to fail.”

Sean Curran, partner at law firm Arnold & Porter, said, “It seems clear AMLA falls short of the far-reaching supervisor that is needed to effectively combat money laundering and terrorist financing across the EU.”

The small number of entities that will be directly supervised, said Curran, “leaves the vast majority to continue under the supervision of their respective member state regulators, retaining the current system of uneven and country-specific implementation of the money laundering directives.”

Some experts warned AMLA’s approach needs to be set correctly from the start or its creation is pointless.

“It’s in no one’s interest for EU legislators, supervisors, and enforcement agencies to be at odds in approach,” said Jayne Newton, director of regulatory expertise at AML compliance vendor Efficient Frontiers International.

More generally, some experts are concerned AMLA’s creation—and remit—will just add more complexity to AML compliance and put EU rules and approach in conflict with global bodies such as the Financial Action Task Force and national supervisors—both in and outside the European Union.