A new era of anti-money laundering and counter-terrorism financing oversight is being ushered in by the European Union through the introduction of AMLAR, the regulation underpinning the bloc’s new supervisory body, AMLA.
According to Moody’s, formally known as the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and Amending Regulations, AMLAR was adopted under Regulation (EU) 2024/1620 to unify the fragmented regulatory landscape and create a central authority to coordinate national efforts.
The urgency of this reform is underscored by estimates suggesting that around 1% of the EU’s GDP is tied to suspicious transactions. Until now, inconsistent enforcement and gaps in national laws have allowed financial criminals to exploit the system. AMLAR sets out to eliminate those loopholes by establishing a single EU-wide rulebook for AML and CFT, bolstering coordination across borders and enhancing legal clarity.
At the heart of this transformation is AMLA, which will begin operations in Frankfurt in summer 2025. Though it will not replace national authorities, AMLA will harmonise supervision across jurisdictions and support the work of national Financial Intelligence Units. By 2028, AMLA will take on direct supervisory duties for 40 high-risk financial institutions. These firms will become the benchmark for compliance standards across the EU, even influencing entities that remain under national supervision.
The broader legislative package also includes the Sixth Anti-Money Laundering Directive (AMLD6) and the directly applicable Anti-Money Laundering Regulation (AMLR). These bring sweeping changes—expanding the scope of entities subject to AML obligations to include crypto-asset service providers and professional football clubs. AMLD6 must be transposed into national law by July 2027, with AMLR taking effect simultaneously.
Among the key requirements introduced is the concept of perpetual KYC (pKYC), which mandates regular and dynamic updates to customer information. High-risk customers must be reviewed annually, while low-risk profiles are updated every five years. However, firms must continuously monitor additional risk indicators, including sanctions updates and changes to beneficial ownership structures, which creates a demand for real-time risk awareness and flexible compliance systems.
The scope of responsibility for traditionally lower-risk sectors has also grown. Football clubs, for instance, must now monitor transfer payments and player transactions, ensuring compliance with AML protocols. Crypto providers are expected to follow equally rigorous identification and transaction screening practices, reflecting regulators’ increasing concern over new money laundering vectors.
To prepare, firms are advised to conduct detailed gap analyses, reviewing their internal controls and revising policies in line with AMLAR’s stricter mandates. Updating training, modernising operational procedures, and investing in advanced RegTech tools will be essential in keeping pace with evolving expectations.
Technology will play a defining role in the future of AML compliance. AI-powered solutions are increasingly central to transaction monitoring, name matching, and due diligence. These tools not only increase detection accuracy but significantly reduce the operational burden associated with manual reviews. Still, success in this area is predicated on robust data governance, as poor data quality can undermine even the most sophisticated systems.
Moody’s is one of the firms at the forefront of this transformation. The company offers an integrated suite of solutions for KYC, KYB, and AML compliance, combining automation, analytics, and verified data sources. Moody’s approach is designed to streamline compliance operations, enhance data reliability, and reduce regulatory risk—enabling institutions to remain compliant and resilient in a rapidly changing regulatory landscape.
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