A significant transformation of the EU’s AML/CFT landscape is well underway, with the introduction of the Anti Money Laundering Regulation (AMLR) scheduled for July 2027 and the Anti Money Laundering Authority (AMLA) preparing for direct oversight of select entities starting in 2028. The product of years of legislative work and political negotiation, these milestones are expected to significantly strengthen the EU’s AML framework, increasing harmonisation across regulatory expectations, supervisory and administrative enforcement practices, and intelligence sharing.
In preparation, national competent authorities responsible for AML/CFT and financial intelligence units (FIUs) across the bloc are undertaking a comprehensive raft of reforms, revisions and initiatives to ensure that their jurisdictions meet the relevant requirements, and that obliged entities are well prepared for the upcoming changes. As ever, in pursuing a more harmonised approach each country within the Union comes from a different starting point and experiences its own set of challenges and opportunities in arriving at a shared destination.
Change on the horizon
A single rulebook to replace fragmented national rules through AMLR, setting out clear expectations for obliged entities, will be applicable as of 10 July 2027. It was proposed by the European Commission back in 2021 and sits alongside the creation of AMLA – a central body capable of ensuring consistent supervisory standards and supporting joint analytical work among FIUs in the region. Together these developments form a central pillar of an EU-wide harmonised AML and CFT framework.
Changes of particular note include the standardisation of risk assessment processes and the introduction of a requirement for annual risk re-assessment that will be applicable to many firms. The information to be collected for CDD purposes, and the means through which it is obtained, are being aligned, limiting possible negative fallout for cross-border activity. It establishes a continent-wide upper limit of €10,000 for cash payments for goods and services, and a requirement for verification of customers for cash payments of €3,000 or above, as well as specific timelines for CDD reviews and the submission of suspicious transaction or activity reports.
Under the reforms, thresholds and definition for beneficial ownership are standardised across the bloc, with parent level responsibility reinforced. One of the biggest upcoming changes includes the extension of AML/CFT obligations to new sectors, especially outside the financial sector, which is expected to lead to the addition of a range of new obliged entities, from crowdfunding platforms to football clubs.
Preparations underway
To ensure a seamless transition, Malta has mapped out the various undertakings required over the year, and work is already well underway. These include the reform of existing legislation, operational amendments and updated timelines for existing processes which must now be harmonised, as well as the collation of relevant information relating to newly obliged entities. On this front Malta benefits from the fact that it is already well practiced in supervising non-financial entities, having done so actively for more than ten years. Non-financial institutions and professions already under Malta’s Financial Intelligence Analysis Unit’s (FIAU) purview include legal and accountancy services, land-based and online gaming companies, real estate agents, high-value dealers , and trust and company service providers.
Supporting compliance and shaping the future
Equally important is the preparation to support compliance and ensure that obliged entities are up to speed with the upcoming changes. To support this process the FIAU, alongside the Malta Financial Services Authority (MFSA), has been focusing on the provision of timely guidance, continuous outreach and education, transparent communication on emerging requirements, and facilitating collaboration across sectors to identify practical challenges early on in the process.
On this score Malta has made an early start, undertaking outreach sessions with both financial and non-financial entities on the subject. This is just one of the areas in which the country’s size and compliance culture is being leveraged to its advantage, offering up more opportunities for direct engagement between the authorities and obliged entities as they navigate the transition. This works to the advantage of both parties as it means challenges are often more easily identified or anticipated and the appropriate support and additional guidance can be readily provided on this basis.
Malta is also working to shape the roll out and the future of AML measures in the EU more broadly. For example, the FIAU has participated in early drafting groups and now contributes actively within almost all working groups responsible for shaping technical standards, supervisory methodologies, and FIU related cooperation frameworks. Through this involvement, the FIAU shares its technical expertise, operational experience, and best practices accumulated over years of intelligence analysis, supervision, administrative enforcement, and regulatory outreach.
Looking forward
There is a still a long road ahead, but if Europe can deliver on the full promise of its AML reform package, the reward will be more consistent AML/CFT supervision, increased harmonisation, and cross border support made easier through enhanced cooperation. Meanwhile, obliged entities should benefit from operating in an environment where compliance standards and enforcement approaches are aligned at the European level.
When it comes to shaping the future of the bloc’s AML efforts, Malta has an important role to play. By leveraging its size, expertise, and prior experience in supervising non-financial entities, the country can help ensure that the emerging framework reflects the realities of all Member States, large and small, diverse in structure yet aligned in purpose.
