If your firm conducts meaningful business in the EU, you are likely to be keeping a close eye on the EU AML reforms now coming through, including AMLR and the establishment of AMLA.
For firms operating across several EU jurisdictions, questions will arise around which rules have been relaxed, which have been strengthened, and how these changes affect your operational workflows. In many cases, dealing with the internal differences that have built up across your organisation over time will prove more challenging, both politically and operationally, than absorbing the new requirements themselves.
As you’ll know, AMLR was conceived to address supervisory variability across Europe, creating a more uniform regulatory framework across the region and allowing firms to manage financial crime risk more consistently. At this point, however, the practical challenge is that many firms still operate AML frameworks that function quite differently from one jurisdiction to another.
As the European framework becomes more harmonised, the pressure will begin to move in the opposite direction, towards reducing those internal differences. Over the next two years, cross-border groups will need to decide where local variation is still justified and where group standards need to become more aligned.
That may be the outcome AMLA is seeking. The question is whether it will prove achievable in practice for the many firms remaining under the direct supervision of their home regulator, rather than one of the “special 40”?
One of the attractions of AMLR is that it should reduce the variation created by national transposition and local interpretation. A directly applicable regulation ought to give firms a clearer base to work from across the EU.
But it does not remove the practical differences firms have been managing for years.
Regulators in some jurisdictions have been highly prescriptive. Some have moved faster and challenged harder. Others have been less predictable or less consistent. Firms have responded over time by adjusting governance, documentation, process design and control expectations to match what local supervisors were likely to ask for.
The question now is what happens to those differences over the next year or two.
It would be a mistake to expect a clean handover from national practice to a settled European model.
A more uneven transition is more likely. National guidance and long-established supervisory habits are unlikely to disappear overnight. AMLA may set a stronger direction of travel, but there is still a real question about how quickly that becomes clear in practice, especially given the volume of work still ahead and the amount of consultation and guidance still to come.
For firms operating across several EU entities, this means decisions may need to be made before everything feels settled. Which local variations still serve a real purpose? Which can be removed? Which exist mainly because they were built around a particular supervisory relationship? Those discussions are often difficult because they cut across local ownership, second line judgement and operational practicality.
A great deal will depend on how AMLA develops in practice and how quickly it begins to shape supervisory expectations.
If you are likely to fall within AMLA’s directly supervised population, this should already be on your agenda. Firms in that group should be mobilising now rather than waiting for complete clarity.
If you are outside that group, the response may differ in scale and urgency. A proportionate approach makes sense. Firms should understand the regulation, keep it on the agenda, and build a clear internal view of how it will affect the organisation, even if they’re not about to launch major changes.
For most cross-border groups, the sensible starting point is a focused internal review of where local variation has accumulated over time.
That usually includes local additions to group policy, differences in evidence expectations, country-specific process steps, uneven quality thresholds, and areas where decisions depend heavily on local interpretation.
It is worth stepping back and asking a broader question about the operating model itself. How harmonised is it already? If materially different approaches are being run across jurisdictions, the work ahead is likely to be more involved than it is for a group already operating within a more consistent model.
A practical way to frame this for boards and senior stakeholders is to keep the message straightforward.
- This is more than a legal change. It may expose differences in how the group has been operating across jurisdictions.
- The transition is unlikely to be neat. Legal alignment will not quickly remove years of local supervisory practice, and AMLA still has a substantial delivery agenda ahead.
- The key questions are where does local variation remain justified, where should group standards be firmer, and where does the operating model depend too heavily on local custom or interpretation.
- A measured response is the right one. Firms likely to fall within direct supervision need active mobilisation. Firms outside that group need a readiness view, a documented position, and enough awareness to avoid being caught unprepared.
This gives senior stakeholders something concrete to engage with and helps avoid moving too early without a clear need, or leaving the issue too late.
Your initial analysis should inform the next phase of planning, whether that means refining an existing programme or initiating a more structured piece of harmonisation work across the group.
At BeyondFS we have already reviewed the key elements of the new framework and the obligations likely to follow from it. If you would like to discuss how this may apply to your organisation, we would be happy to help.
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