AMLA to have sanctions role but failure to agree on who decides its location and FCA speaks up on AI

SUPER TUESDAY in Brussels did not quite live up to its billing. After marathon talks at the “jumbo trilogue” of EU officials, they finally agreed on the legislation and scope of the new AML Authority. But the talks broke up early this morning with no agreement on who decides where to locate the authority. The best deal on the table – an individual vote for each of the 27 Member States and 27 votes for the European Parliament (the Eurovision option) was rejected, for now at least. Negotiators have to come back on the location decision – either next Monday or the New Year. It won’t be easy.

Critically, AMLA will have a sanctions role. The European Parliament inserted new rules against the circumvention of targeted sanctions and AMLA will have a role in banks and financial services implementing targeted financial sanctions. New provisions also include the creation of reporting channels for receiving and handling information on breaches and protection of whistle-blowers, as well as effective cooperation between national FIUs and AMLA.

The Authority is also being charged with directly supervising the most risky financial entities - those with operations in at least 6 member states - and in any event, supervising one per member state. “It will also have strong powers to step in in case of supervisory failures and take over supervisory tasks,” the parliament said in a statement.

Eva Maria Poptcheva, one of the MEP negotiators said early today: “We have a deal on the substantive provisions of the new Anti-money Laundering Authority. AMLA will be a game changer to crack down on dirty money in the EU. It will supervise the 40 riskiest financial entities and it will oversee the non-financial sector to prevent cases like the Pandora Papers. AMLA will also play a crucial role in avoiding the circumvention of targeted financial sanctions like the ones included in the 11 sanctions packages approved by the EU against Russia. The next step is to find the best possible location to host AMLA.”

In Britain meanwhile, the government is also tackling sanctions with the creation of the Office of Trade Sanctions Implementation (OTSI). The new unit is tasked with cracking down on companies evading Russian sanctions with investigations, penalties, and even criminal referrals.

Now here are news updates for the week so far:

AMLA DECISION: The European Parliament and Member States have agreed on the legislation and scope of the new AML Authority (AMLA) – but critically failed to decide on how to decide its location. AMLA will however play a role in policing sanctions evasion. The negotiators agreed it should a unit look at the circumvention of targeted financial sanctions like the ones included in the 11 sanctions packages approved by the EU against Russia. Negotiators agreed it would directly supervise the most risky financial entities – those with operations in at least 6 member states – and in any event, supervise one per member state. Marathon talks at Tuesday’s “jumbo trilogue” broke up early this morning (Wed) with no white smoke on who decides which city to locate the agency.

UK ENFORCEMENT UNIT: The British government said on Monday it was creating an enforcement unit to increase its power to crack down on companies evading Russian sanctions. The Office of Trade Sanctions Implementation (OTSI) will be responsible for the civil enforcement of trade sanctions, investigating potential breaches, issuing penalties and referring cases for criminal enforcement. It will also help businesses comply with sanctions, the government's Department for Business and Trade said, and its remit will include activity by any UK national or UK-registered company that may be avoiding sanctions by sending products through other countries.

CYBERCRIME SHELL COMPANIES: Somali reporter Abdalle Ahmed Mumin was doubly distressed when he heard that a colleague had been abducted by masked gunmen at the University of Mogadishu on the morning of Aug. 17. A fellow journalist was missing and Mumin - the chairman of the Somali Journalists Syndicate - had little way of getting the word out. Digital sabotage had knocked his syndicate's website and email accounts offline a few days earlier. "I can still feel the frustration," Mumin told Reuters. “Our link to the outside world, to the international media, is our website."

*** The ’European Anti-Financial Crime Summit 2024’ is taking place in Dublin on May 16 2024. The leading AML and FCC conference attracts 450 decision-making executives from across the EU, UK and elsewhere. The 2024 will also feature the importance of the transatlantic FCC alliance. EAFCS2024 at the RDS convention centre in central Dublin next year will also have extended exhibition and networking opportunities. Have you booked your tickets yet? EARLY BIRD RATES AVAILABLE NOW. You can do so HERE: 

FCA SPEAKS UP ON AI: As criminals make "unfettered" use of artificial intelligence (AI) to disrupt markets and scam consumers, Britain has a cocktail of rules already in place to tackle them, the Financial Conduct Authority (FCA) said on Tuesday. The European Union has just provisionally approved a landmark law to regulate AI, the first of its kind globally, and piling pressure on other jurisdictions to follow. #FCA CEO Nikhil Rathi said it was important not to "jump in" to regulate every facet of a technology whose implications are yet to be fully understood.

CRYPTO EXCHANGE SETTLES FOR $2M: KuCoin, one of the world's largest cryptocurrency exchanges, has agreed to block New York users from its platform and pay $22 million to settle a lawsuit brought by the state as part of its push to rein in digital assets companies. Attorney General Letitia James sued Seychelles-based KuCoin in March, accusing the platform of failing to register with the state before letting investors buy and sell cryptocurrencies on its platform."Crypto companies should understand that they must play by the same rules as other financial institutions," James said in a statement on Tuesday.

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Have a great Wednesday 👋

Stephen and the team at AMlintelligence.