What changed

SHORT JUSTIFICATION

Anti Money Laudering Authority (AMLA) is a key institutional element of the package of proposals on Anti-Money-Laundering and Countering Terrorist Financing. Although the AMLA should join the family of the European Supervisory Agencies, it has very distinct roles, tasks and powers given the nature of AML/CFT mission which puts it at the nexus of supervision, law-enforcement and administrative cooperation. Your rapporteur therefore believes that in order to respond most efficiently to this mission, it is essential to enhance both internal and external governance of the new Authority, including accountability and transparency arrangements.

According to Europol, around 1% of the EU’s GDP is involved in suspect financial activity. Money laundering and use of laundered illicit proceeds to finance terrorism pose a serious threat to the EU’s economy, to the wider financial system and to the security of Union citizens. Effective measures at EU level to tackle money laundering and counter terrorism financing are therefore essential.

Due to the nature of their responsibilities, the Chair, the Vice-Chair and Executive director should be subject to stricter accountability and integrity rules and responsibilities in which the European Parliament should play a major role.

The Commission’s proposal to establish a new decentralised agency - the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) - stems from the May 2020 ‘Action Plan for a comprehensive Union policy on preventing money laundering and terrorist financing’ and is part of a package of four legislative proposals presented in July 2021. Under the proposal, AMLA would be responsible for coordinating national supervisory authorities to ensure correct and consistent application of EU rules and for supporting Financial Intelligence Units to enhance their analytical capacity and ability to provide effective financial intelligence for use in law enforcement. It would also directly supervise some of the riskiest financial institutions operating in a number of Member States or requiring immediate action to address imminent risks.

In its supervisory function, the capacity of the AMLA to ensure compliance and harmonized approach can be usefully enhanced through increased transparency and reporting measures. In its investigative function, given its crucial coordination role, its leadership of joint analysis teams should be also bolstered.

Your Rapporteur welcomes the central aims of the proposal and is convinced that AMLA can help improve the detection of suspicious transactions and close loopholes currently being exploited by criminals and terrorists. Nevertheless, in line with his approach to decentralised agency files, he considers that the policy substance of the proposal should be dealt with by the lead committees.

The challenges related to AML/CFT mission require the Authority to avail itself of plurality of expertise. Is should therefore draw not only from the experience of the relevant EU institutions, agencies and bodies, but also from organisations outside of the EU institutional orbit. Therefore the governance mechanisms should provide for an active involvement of civil society and other organisations with relevant expertise on an ad-hoc basis as well as through establishment of a permanent advisory body drawn from the representatives of the civil society.

As such, the draft opinion focuses on those areas where the Committee on Budgets can add value, therefore in particular on the financial provisions, governance rules and provisions relating to reporting and evaluation to ensure proper parliamentary scrutiny. Your Rapporteur assesses the proposal notably against the 2019 Schoepflin report, the Joint Statement of the European Parliament, the Council and the Commission on decentralised agencies of 19 July 2012 and the Common Approach and the Framework Financial Regulation governing decentralised agencies.

Finally, the proposal should guarantee that the AMLA is set up in a timely manner, in line with the principles of Joint Statement and Common Approach, and that its operation is regularly reviewed so that it has means commensurate with its missions and is able to adapt flexibly to future challenges.

Budgetary impact and financial provisions

According to the Commission proposal, AMLA will need to be fully resourced by the end of 2025 to enable direct supervision to begin in early 2026. AMLA would then have estimated annual outgoings of EUR 45.6 million and a staff of 250. The agency would be partially self-financed through fees, as is the case with a handful of existing agencies, such as the European Medicines Agency. The Commission intends that 75% of the agency’s revenue would come from fees levied on entities subject to anti-money laundering and countering financing of terrorism rules (‘obliged entities’) and the remaining 25% from the EU budget. The EU budget contribution is to come from the margin under Heading 1, which is to be welcomed as the creation of AMLA should therefore have no direct impact on existing programmes or other expenditure lines.

Your Rapporteur introduces a set of targeted amendments: a) to emphasise the need for the agency to be resourced in a manner commensurate with its tasks and responsibilities and to have the necessary autonomy over contract agent recruitment, learning the lessons from the early staffing challenges of the European Public Prosecutor’s Office, b) to ensure that fees are calculated in such a way as to provide a stable revenue stream and thus predictability for the EU budget and c) to enhance transparency regarding all AMLA revenue. It will be essential in discussions on the scope of AMLA’s mandate to bear in mind the budgetary impact of any changes and to consider where potential additional resources may be found.

Governance, parliamentary scrutiny and evaluation

Your Rapporteur introduces a number of more technical amendments to ensure that provisions in the AMLA regulation comply fully with the principles in the Common Approach. This includes removing the Commission’s veto right over administrative and budgetary decisions taken by the Executive Board where it in any case has a voting right in accordance with standard practice in agency governance. Autonomy in budgetary and administrative decision-making is important for the Authority’s effectiveness.

Other amendments seek to enhance parliamentary scrutiny and accountability with respect to multiannual programming and the appointment of the Chair of the Authority and to ensure that the performance of the agency is fully assessed on a five-yearly basis to ensure that EU funds are being spent effectively.

AMENDMENTS

The Committee on Constitutional AffairsBudgets calls on the Committee on Economic and Monetary Affairs and the Committee on Civil Liberties, Justice and Home Affairs, as the committeescommittee responsible, to take into account the following amendments:

Amendment 1

Or. en

Justification

This brings the Recital into line with the wording in Article 87 and the Common Approach.

Amendment 3

Proposal for a regulation

Recital 2937

Or. en

Justification

To improve the clarity of the drafting.

Amendment 4

Proposal for a regulation

Recital 3239

Or. en

Justification

It is stipulated elsewhere in the text that the Executive Board takes the decision in all cases and providing an opinion or advice is just an option for the General Board.

Amendment 5

Proposal for a regulation

Recital 3740

Or. en

Justification

A simplification and clarification of the drafting to bring it into line with the articles.

Amendment 6

Proposal for a regulation

Recital 4041

Or. en

Justification

To bring the wording into line with Article 46(4).

Amendment 7

Proposal for a regulation

Recital 4142

Justification

The General Board should make sure that it has at its disposal broad range of expertise beyond Union institutions, bodies and agencies and invite as observers in consultative capacity organisations dealing extensively with AML/CTF issues such as Finance Watch or Transparency International.

Or. en

Justification

In line with changes in the article, this removes the veto right for the Commission, which is not in line with standard practice in agency governance or the Common Approach.

Amendment 8

Proposal for a regulation

Recital 4243

Or. en

Justification

In line with changes in the article, this removes the veto right for the Commission, which is not in line with standard practice in agency governance or the Common Approach.

Amendment 9

Proposal for a regulation

Recital 4344

Or. en

Justification

To more clearly explain the nature of the cooling-off period for Members of the Executive Board.

Amendment 10

Proposal for a regulation

Recital 4446

Or. en

Justification

The Executive Director's tasks are stipulated in the regulation and he/she is by definition the senior official.

Amendment 11

Proposal for a regulation

Recital 4548

Or. en

Justification

To properly reflect the role of the Budgetary Authority and to make clear that adequate staffing and funding is required to enable AMLA to function. This may require a revision of the financial statement if the scope is expanded. Moreover, in light of experience with EPPO, emphasises the need for AMLA to have autonomy over contract agent recruitment.

Amendment 12

Proposal for a regulation

Recital 4649

Or. en

Proposal for a regulation

Recital 46 a (new)

Recital 50

Or. en

Justification

Cooperation with the EPPO and OLAF is one of many provisions in the Delegated Financial Regulation, which applies in full.

Amendment 14

Proposal for a regulation

Recital 5651

Or. en

Justification

Regulation 883/2013 is the OLAF regulation so relates only to OLAF's role in conducting investigations etc.

Amendment 15

Proposal for a regulation

Article 30 – paragraph 5 – point c a (new)

Recital 64 a (new)

Justification

AM is intended to provide for possibility to request the Commission to take decision on urgent cases under short deadlines - same as those provided to the national financial supervisor to respond and to the Authority to submit a request for a direct supervision.

Or. en

Justification

In line with the amendment to Article 88, the evaluation should review the Authority's performance every five years.

Amendment 16

Proposal for a regulation

Article 3046 – paragraph 62 – subparagraph 2

Justification

AM is intended to provide for possibility to request the Commission to take decision on urgent cases under short deadlines - same as those provided to the national financial supervisor to respond and to the Authority to submit a request for a direct supervision.

Or. en

Justification

Proposed simplification of drafting.

Amendment 17

Proposal for a regulation

Article 3346 – paragraph 12 a– (new)subparagraph 3

Justification

Authority bears primary responsibility for the coordination and has to ensure according to paragraph 1 that the joint analysis is launched within 20 days of notification. It should therefore be given responsibility for coordination, conduct and settlement of disagreements between FIUs.

Or. en

Justification

The meaning of 'high-level' is unclear and it should be for the authority to decide freely on alternate that replaces the voting member and therefore casts a vote on behalf of the authority.

Amendment 18

Proposal for a regulation

Article 3352 – paragraph 34

Justification

Due to its responsibility for the conduct of the joint analyses, the Authority's staff participating should be automatically grated access to all the data collected by the joint analysis teams.

Or. en

Proposal for a regulation

Article 4353 – paragraph 34 – subparagraphpoint 3a

Justification

In order to enhance the independence of the Authority and transparency of its decisions there should be no discretion whether to publish the reasons given by the national supervisory authorities.

Or. en

Proposal for a regulation

Article 4354 – paragraph 31 – subparagraph 3 a (new)1

Justification

In order to enhance the Authority's transparency and enhance harmonised approach, it should include in its annual report information on the guidelines and recommendations it has issued and define steps to enhance future compliance.

Or. en

Justification

This provision is included, for example, in the Frontex Regulation and strengthens accountability.

Amendment 21

Proposal for a regulation

Article 4555 – paragraph 1 – point 4 a (new)2

Justification

In order to advise the Authority efficiently, the Civil Society Advisory Body should be established according to Article -60

Or. en

Justification

Granting the Commission a veto right in such cases is not in line with standard agency governance or the Common Approach.

Amendment 22

Proposal for a regulation

Article 4656 – paragraph 2 – subparagraph 1 – point c a (new)

Or. en

Justification

The intention of the draft provision lacks clarity. Furthermore, the Chair of the Authority should be heard by both Council and Parliament and Parliament should give its consent to his/her appointment.

Amendment 23

Proposal for a regulation

Article 4658 – paragraph 2 – subparagraph 2

Justification

Where several entities in the Member State are entitled to perform supervisory tasks, they should select their representative to the General Board in respect of the principle of gender balance.

Or. en

Proposal for a regulation

Article 4659 – paragraph 41 – point i

Justification

It is essential that prior to take decisions the General Board in both supervisory and FIU composition avails itself of plurality of expertise not only from Union institutions, bodies and agencies, but also from other organisations, including civil society organisations which possess such expertise relevant to AML/CTF, such as Finance Watch or Transparency International.

Or. en

Amendment 25

Proposal for a regulation

Article 52 – paragraph 1 – point a

Justification

Considering that Vice-Chair is by the regulation empowered to exercise the tasks of the Chair on its behalf their appointment, accountability, transparency and integrity obligation should be the same.

Or. en

Amendment 26

Proposal for a regulation

Article 52 – paragraph 6

Justification

Considering that Vice-Chair is by the regulation empowered to exercise the tasks of the Chair on its behalf, the procedure for their appointment, as well accountability, transparency and integrity obligations should be identical.

This task is repeated in point (l). Point (l) is therefore deleted and all the detail is added to point (i).

Or. en

Amendment 25

Amendment 27

Proposal for a regulation

Article 5259 – paragraph 7 – subparagraph 1 – introductorypoint partl

Justification

Considering that Vice-Chair is by the regulation empowered to exercise the tasks of the Chair on its behalf, the procedure for their appointment, as well accountability, transparency and integrity obligations should be identical.

Or. en

Amendment 28

Proposal for a regulation

Article 53 – paragraph 5

Justification

Considering that Vice-Chair is by the regulation empowered to exercise the tasks of the Chair on its behalf, the procedure for their appointment should be the same.

Covered in point (i).

Or. en

Amendment 26

Amendment 29

Proposal for a regulation

Chapter III – Section 3 – title

Or. en

Amendment 30

Proposal for a regulation

Article 5659 – titleparagraph 3

Or. en

Amendment 31

Proposal for a regulation

Article 56 – paragraph 1

Justification

Considering that Vice-Chair is by the regulation empowered to exercise the tasks of the Chair on its behalf, the procedure for their appointment, as well accountability, transparency and integrity obligations should be identical.

The agreement does not relate to the headquarters of the agency, but to a satellite office.

Or. en

Amendment 27

Amendment 32

Proposal for a regulation

Article 56 – paragraph 1 a (new)

Or. en

Amendment 33

Proposal for a regulation

Article 56 – paragraph 2

Or. en

Amendment 34

Proposal for a regulation

Article 5864 – paragraph 43 – subparagraph 1 a (new)

Justification

Amendment proposes procedure equvivalent to the appointment of the Chair and Vice-Chair, the Executive Board shall appoint the Executive Director after the approval of the Parliament.

Or. en

Amendment 35

Proposal for a regulation

Article 58 – paragraph 5 – subparagraph 2

Justification

While Executive Board has the ultimate responsibility for the dismissal of the Executive Director, Parliament should be given the same right of initiative as the Commission in this process.

To ensure transparency of revenue and safeguard the role of the budgetary authority.

Or. en

Amendment 28

Amendment 36

Proposal for a regulation

ChapterArticle III65 – Sectionparagraph 41 a (new) – title

Or. en

Amendment 37

Proposal for a regulation

Article 59 a (new)

Justification

Establishment of the Civil Society Advisory Body aims to include representatives of the civil society in the governance system of the Authority in an advisory capacity, with rights of participation at the meetings of the General Board. Given the role and responsibilities, provisions should be made for their access to relevant resources as well as expertise, but also for the management of the potential conflicts of interest.

It is important that fees provide stable and predictable revenue so as to ensure stability and predictability for the EU budget.

Or. en

Amendment 29

Amendment 38

Proposal for a regulation

Article 59 a – paragraph 1 (new)

Or. en

Amendment 39

Proposal for a regulation

Article 59 a – paragraph 2 (new)

Or. en

Amendment 40

Proposal for a regulation

Article 59 a – paragraph 3 (new)

Or. en

Amendment 41

Proposal for a regulation

Article 59 a – paragraph 4 (new)

Or. en

Amendment 42

Proposal for a regulation

Article 59 a – paragraph 5 (new)

Or. en

Amendment 43

Proposal for a regulation

Article 59 a – paragraph 6 (new)

Or. en

Amendment 44

Proposal for a regulation

Article 7288 – paragraph 21 – subparagraph 1

Justification

To increase the transparency of the Authority's actions and in order to assess the compliance with the guidelines and recommendation it has issued, specific provision should be made to this effect in the content of its annual report.

Or. en

Amendment 45

Proposal for a regulation

Article 72 – paragraph 4

Justification

Parliament should able to set a deadline for the answers given by the Authority, similarly to the established practice with other European Supervisory Authorities.

AMLA is operational from 1 January 2024 and the five-year cycle should apply from the beginning. Moreover, there is no need to assess results and continuation of the Authority only every 10 years. Proper use of Union funds requires more frequent analysis.

Or. en

Amendment 30

Amendment 46

Proposal for a regulation

Article 7788 – paragraph 23

Justification

Objectives of the cooperation are restrictive with regard to the extent of the EDPB mandate.

Or. en

Amendment 47

Proposal for a regulation

Article 82 – paragraph 5

Justification

Due to the lack of updated legal regime based on Article 15(3) TEU, the Regulation 1049/2001 does not automatically apply to the authority. The Regulation sets number of particular restrictions with regard to access to documents held by it. To increase the transparency in that regard, the Authority should publish an annual report on the implementation of the Regulation, in order to assess the implementation of its provisions, including most recent jurisprudence, in particular with regard to the exceptions to the disclosure.

See amendment above. Proper use of Union funding requires frequent assessment of results, including an evaluation whether the continuation of the Authority is still justified.

Or. en

Amendment 48

Proposal for a regulation

Article 88 – paragraph 1 – introductory part

Or. en