Home » Germany Plans New Financial Crime Authority in Bid to Tackle Money Laundering
Economy Europe Featured Germany News World News

Germany Plans New Financial Crime Authority in Bid to Tackle Money Laundering

Berlin (23/8). Germany wants to create a new financial crime authority that would bundle several fragmented competencies, including sanctions enforcement, said a finance ministry paper on Tuesday.

There are currently more than 300 supervisory bodies across Germany, a figure the finance ministry would like to reduce.

With the new authority, the finance ministry hopes to make it easier to tackle complex international money laundering cases, which have long been a weak spot for the country.

“We need to do better in many areas,” said a government representative, referring to the fight against money laundering.

The current FIU unit, which receives suspicious activity reports, will work with the new authority, and a coordination unit will be set up to supervise the non-financial sector.

Under the plans, AMLA will launch by 2023 and become fully operational by 2026, with a staff of 250 employees and a total annual budget of €46 million. The EU will cover 25 percent of that amount, with financial institutions and other AML-regulated companies covering the remaining 75 percent.

Negotiations to define AMLA’s regulatory powers and scope are still ongoing, but the European Central Bank, or EBC, determined in a 21-page opinion in February that “12 to 20 obliged entities” will qualify for direct, EU-level supervision.

In the same document, the ECB recommended enhancing the planned agency’s coordination with national non-financial regulators and potential oversight of non-bank businesses.

Germany, which already hosts the ECB’s headquarters in Frankfurt, was competing with Austria, Ireland, Italy, Lithuania and France, which houses the EU’s current, more limited AML agency, the European Banking Authority, in Paris.

German officials are hoping to make Frankfurt home to the EU’s planned Anti-Money Laundering Authority, also known as AMLA, although officials in Brussels say no decision has been made on where the authority will be headquartered.

A sentence buried in the “other approvals” section of thousands of pages of German federal budget documents Friday proposes to set aside €10 million to cover “financial support for the new AMLA in Frankfurt” from 2023 to 2027.

The German proposal calls for €10 million to be paid out in €2 million annual installments.

Details on the ministry’s plans will be published this week.

(Reporting by Christian Kraemer, Writing by Miranda Murray; Editing by Madeline Chambers)