Riga: The Latvian capital learned the hard way what a hole in Europe’s defences against dirty money can cost. The collapse of a local bank accused of laundering on an industrial scale was one of a string of scandals, from the Baltic to Scandinavia, that exposed how a banking union with a single market could still be policed by twenty-seven national regulators of wildly varying zeal. The bloc’s response is now taking physical shape in Frankfurt, where the Authority for Anti-Money Laundering and Countering the Financing of Terrorism, known as AMLA, has been building since it opened its doors in the middle of last year.
The agency spent the spring turning a skeleton into an operating supervisor. Through May it ran public hearings on the technical rulebook that will give the new single regime teeth, including draft standards on how groups that span several countries must be supervised as one entity, a session that drew more than six hundred participants, and guidance on the business-wide risk assessments that obliged firms will have to perform. These are the unglamorous foundations, the definitions and methodologies on which later enforcement will rest, and the heavy turnout reflects how much money and compliance work hangs on the wording.
AMLA’s design is deliberately layered. It will directly supervise a small number of the highest-risk financial institutions that operate across borders, while setting the standards and coordinating the national authorities that continue to watch everyone else. The point is consistency, ending the situation in which a bank shut out of one member state could carry on much as before through a subsidiary in another with a lighter touch. The authority also gains a role in coordinating financial intelligence units and a backstop power to step in where national supervision fails.
The timetable is more sober than the ambition. Although operational since last July, AMLA has said it will not be fully up and running until 2028. It intends to finalise its risk-assessment methodology during this year, begin selecting the entities it will supervise directly in 2027, and only start that direct supervision in 2028. For an institution meant to answer years of scandal, that is a long runway, and it leaves the existing patchwork in charge of the riskiest cases for some time yet.
Supporters argue the phasing is simply realistic. Standing up a credible European supervisor, recruiting specialists, agreeing the rulebook and winning the trust of national bodies cannot be rushed, and a botched launch would be worse than a measured one. They point out that the underlying single rulebook, a regulation that harmonises anti-laundering obligations across the bloc, gives AMLA far firmer ground than the loose directives that preceded it.
Sceptics worry about the gap between mandate and muscle. They question whether an agency directly policing only a handful of firms can change behaviour across thousands, whether its budget and headcount match the task, and whether national authorities will cede real authority or merely the appearance of it. For a city like Riga, which paid a reputational price for Europe’s earlier complacency, the test is simple enough. The next scandal, when it comes, will show whether a single supervisor with a long runway was built fast enough to catch it.
