Money laundering: Europe (finally) takes action
10/22/2025
6 min
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Money launderers don’t recognize borders. They take advantage of the fragmentation of European surveillance and legislation to slip through the net. With the creation this summer of the European Anti-Money Laundering Authority (AMLA), can the European Union centralize the fight against illicit finance?
The likely and imminent inclusion of Monaco, a global symbol of wealth and discretion, in the EU’s list of high-risk countries for money laundering, has raised more than a few eyebrows.
The principality’s potential inclusion on the blacklist highlights the challenge of combating illicit finance in a region like the EU, where open borders contrast with anti-money laundering (AML) enforcement and oversight which remain largely confined to individual nations.
A transaction might begin in a high-risk jurisdiction, route through a European bank, and end in a London real estate deal or a Swiss trust. This is exactly why international coordination is so important; without it, money launderers take advantage of the fragmented oversight, especially across the EU.
With the European Anti-Money Laundering Authority (AMLA) coming into force this summer, the European Union is opting for centralization.
European and French anti-money laundering policies have failed for several reasons: uneven enforcement of regulations, a lack of resources and international cooperation, sanctions that are not sufficiently dissuasive in the face of increasingly sophisticated techniques, and a global phenomenon that is difficult to pin down.
To make progress, it is necessary to strengthen the harmonization of rules, increase the resources available to authorities, adopt advanced technologies, and improve the transparency of structures. These are precisely the objectives that the AMLA aims to achieve.
One hundred billion euros per year
Some rare and cautious estimates confirm that illicit financial flows move across borders with ease, and that their amounts are staggering. Estimates from the UN Office on Drugs and Crime suggest that money laundering accounts for 2 – 5% of global GDP, or $800 billion – $2 trillion in current US dollars. In the EU alone, proceeds from criminal activities are estimated over €100 billion annually, only a negligible percentage of which are eventually seized. Research has also estimated that money from drug trafficking, human smuggling, and terrorism often passes through banks in 4 to 6 different countries before it is cleaned and enters the legitimate economy.
Large EU banks have also been involved in several high-profile scandals. Danske Bank, became the epicenter of Europe’s biggest money laundering scandal when it was revealed that over €200 billion in suspicious transactions flowed through its Estonian branch. Deutsche Bank has faced multiple investigations for facilitating billions in illicit transfers, including through its work with Danske and links to the “Russian Laundromat” scheme. ING paid a €775 million fine to Dutch authorities for violations of anti-money laundering legislation in 2018.
Tracfin in France
European countries implement the EU’s anti-money laundering directives with varying levels of ambition. France, for instance, has shown robust commitment to fighting money laundering through the serious and proactive approach of its financial intelligence unit, TRACFIN, which in 2022 significantly increased its analysis of suspicious transactions, expanded cooperation with domestic and international partners, and enhanced its use of advanced data analytics to detect complex illicit flows.
Despite this progress, certain recent cases show that illicit flows still escape detection by TRACFIN.
Deterring failures in internal banking controls
Germany, despite its economic heft, has faced criticism for weak oversight, with implementation varying across federal states and challenges in international cooperation, particularly before the collapse of Wirecard (a company specializing in digital payments).
By contrast, Dutch authorities have followed the US example by imposing major fines on institutions like ING and ABN AMRO, demonstrating a strong resolve to combat financial crimes by deterring internal control failures in banks.
These uneven approaches to the fight against money laundering in EU member states can be explained by several factors.
Different interpretations of AML rules create gaps in legal coverage, while inconsistent cross-border judicial cooperation, especially involving third countries, hampers effective enforcement. Additionally, the powers and responsibilities of Financial Intelligence Units vary widely, and the lack of a standardized format for suspicious transaction reports complicates the integration of data into the EU’s central platform, making coordinated action more difficult than necessary.
But this is all about to change.
Enter the European Anti-Money Laundering Authority (AMLA)
To address these weaknesses, the EU is creating the European Anti-Money Laundering Authority (AMLA), set to start operations this summer and be fully operational from 2028. Based in Frankfurt, AMLA will directly supervise around 40 high-risk cross-border financial institutions, harmonize enforcement across member states, and coordinate national regulators.
It will have the authority to conduct on-site inspections, impose sanctions, and strengthen the EU’s overall anti-money laundering framework. To support AMLA’s role and ensure consistent application of rules, the EU is also introducing a single rulebook regulation that will replace varying national laws with one unified set of standards across all member states.
With AMLA, Brussels is betting that centralization can succeed where decentralization failed. Decentralization meant that each member state applied anti-money laundering rules in its own way, transposing European directives into national law. This led to conflicting standards. For example, some countries imposed different reporting thresholds or had differing definitions of entities to be monitored, rendering cooperation ineffective and controls uneven.
However, AMLA may face challenges such as navigating the complex legal and institutional differences among member states, securing adequate resources and expertise to oversee a broad range of sectors, and balancing national sovereignty concerns with the need for effective, unified enforcement across the EU.
Symbolic warning
As the EU prepares to launch AMLA, the inclusion of places like Monaco on its blacklist is a symbolic warning: no jurisdiction, no matter how wealthy or prestigious, is immune to scrutiny. The future of the AMLA as a truly powerful supervisory authority will depend on three pillars: political will, the soundness of its institutional design, and the extent of the human and technical resources allocated to it.
Without political will, the AMLA risks being weakened by national interests. Without a solid institutional design, its powers could face legal and bureaucratic obstacles. Without sufficient human and technical resources, it will not be able to exercise direct and effective supervision over high-risk entities or coordinate national authorities.
Carmela D’Avino, IÉSEG School of Management
This is an English version of an article originally published in French on The Conversation France in July 2025.
