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EU to clamp down on dirty money with new agency based in Germany

The watchdog, set to launch in 2025, will lead a European push to curb illicit financial flows.

Frankfurt has been chosen to host the European Union’s new dirty money watchdog, clearing the way for a long-awaited suite of anti-money laundering reforms.

The German financial hub beat several major European cities — including Brussels, Dublin and Paris — in a competitive bidding process, which culminated in a final vote by the European Council and Parliament on Feb. 22.

The anti-money laundering agency, known as AMLA, is the centerpiece of the EU’s 2021 plan to curb illicit financial flows and improve coordination between financial intelligence authorities within the bloc. The selection of AMLA’s headquarters means the European Parliament can now vote to adopt the wider legislative package.

“Today is not only about the choice of a city, above all it’s a significant step forward in the fight against financial crime,” said Willem van de Voorde, Belgium’s ambassador to the EU, in a press conference following the vote.

“AMLA will be a powerful tool in ensuring the integrity of the European financial system and protecting our citizens from the harmful impacts of money laundering and terrorist financing.”

The agency, slated to launch in mid-2025, will be tasked with ensuring member states comply with the EU’s anti-money laundering rules and with providing cross-border supervision of financial entities exposed to illicit finance risk.

AMLA will also seek to improve information sharing between the bloc’s national Financial Intelligence Units. The new bills grant the intelligence units additional powers, including access to beneficial ownership information, and apply to new categories of companies, such as football clubs.

“AMLA will be a game-changer in cracking down on dirty money in the EU,” said Eva Poptcheva, a Spanish member of the European Parliament, in a statement.

“It will supervise the riskiest financial entities, oversee the non-financial sector, and play a crucial role in stopping evaders from circumventing targeted financial sanctions.”

Nine member states submitted bids — and engaged in intense lobbying campaigns — to host AMLA, which is expected to bring hundreds of EU officials with it.

Frankfurt, in the German state of Hesse, is also home to the European Central Bank. State officials said AMLA would further strengthen the city’s role as a center for financial services and compliance in Europe.

“The AMLA in Frankfurt creates a center for EU supervision: the immediate proximity of the ECB and AMLA is good for both institutions,” Hessian Finance Minister Alexander Lorz said in a statement.

Hesse has sought to position itself as a global leader in tackling financial crime in recent years.

In 2023, the state announced it had purchased the Pandora Papers dataset from an undisclosed seller and intended to lead an international investigation based on the documents. ICIJ does not hand over documents to authorities.

In a statement to ICIJ, the Hessian Ministry of Finance said it looked forward to expanding its close cooperation with national and European authorities.

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