Source: OJ L, 2024/1620, 19.6.2024Current language: EN
- Anti-money laundering
Basic legislative acts
- Anti-money laundering authority regulation (AMLAR)
Article 32 Requests to act in exceptional circumstances following indications of serious, repeated or systematic breaches
Summary What does Article 32 of the Anti-money laundering authority regulation (AMLAR) say?
This article establishes an escalation mechanism that allows the Authority to intervene in the supervision of non-selected obliged entities — those not already under the Authority's direct supervision as described in Article 13.
It sets out a step-by-step process: national financial supervisors must alert the Authority when a non-selected entity's compliance or ML/TF risk exposure deteriorates rapidly and significantly.
The Authority can then direct the national supervisor to investigate and consider sanctions.
If that request goes unanswered within 10 working days, the Authority can escalate to the Commission to seek a temporary transfer of supervisory powers over that entity, effectively pulling it under the Authority's direct oversight for a capped period.
Important points:
- Financial supervisors are required to notify the Authority when a non-selected obliged entity's compliance or ML/TF risk exposure deteriorates rapidly and significantly, especially where the impact could spread across Member States or threaten the Union's financial system.
- The Authority can request a national financial supervisor to investigate and consider imposing sanctions on a non-selected obliged entity where it has indications of serious, repeated or systematic breaches.
- Where a national supervisor fails to respond within 10 working days, the Authority may request the Commission to authorise a temporary transfer of supervisory tasks and powers for a maximum of three years, with the possibility of one extension of the same maximum duration.
Springlex's summary of the article, a reading aid, not a substitute for the legal text.
Financial supervisors shall notify the Authority where the situation of any non-selected obliged entity with regard to its compliance with Regulation (EU) 2024/1624, Regulation (EU) 2023/1113, any other legal provisions adopted for the implementation of those Regulations or any administrative act issued by any supervisor and its exposure to ML/TF risks, deteriorates rapidly and significantly, in particular where such deterioration might negatively impact several Member States or the Union as a whole or undermine the integrity of the Union’s financial system.
The Authority may, where it has indications of serious, repeated or systematic breaches by a non-selected obliged entity, request its financial supervisor to:
investigate such indications, which could concern breaches of Union law or, where such Union law is composed of directives or expressly grants options for Member States, breaches of national law to the extent that that national law transposes directives or exercises options granted to Member States by Union law; and
consider imposing sanctions on that entity in respect of such breaches in accordance with directly applicable Union law or national law transposing directives.
In that context, the Authority may, where necessary, also request the financial supervisor of a non-selected obliged entity to adopt an individual decision addressed to that entity requiring it to undertake all necessary actions to comply with its obligations under directly applicable Union law or under national law to the extent that it transposes directives or exercises options granted to Member States by Union law, including the cessation of any practice. The requests referred to in this paragraph shall not impede ongoing supervisory measures by the financial supervisor to which the request is addressed.
A request referred to in paragraph 2 may be initiated where the Authority has indications of a serious, repeated or systematic breach:
following notifications by financial supervisors pursuant to paragraph 1;
as a result of the Authority’s own collection of well-substantiated information; or
upon receipt of information from Union institutions, bodies, offices or agencies, or from any other reliable and credible information source.
The financial supervisor concerned shall comply with any request addressed to it in accordance with paragraph 2 and shall inform the Authority as soon as possible, and at the latest within 10 working days of the day of the notification of such request, of the steps it has taken or intends to take to comply with that request.
Where a request referred to in paragraph 2 is not complied with or information on the steps taken or intended to be taken to comply with it is not provided to the Authority within 10 working days of the day of the notification of the request, the Authority may request the Commission to grant permission to transfer temporarily the relevant tasks and powers referred to in Article 5(2) and Article 6(1) related to direct supervision of the non-selected obliged entity from the financial supervisor concerned to the Authority.
A request from the Authority to the Commission pursuant to paragraph 5 shall contain the following:
a description of the serious, repeated or systematic breaches of the directly applicable requirements by the non-selected obliged entity and an explanation of why such breaches fall within the scope of competence of the Authority, pursuant to paragraphs 2 and 3;
an explanation of why the request to the financial supervisor referred to in paragraph 2 did not result in any action being taken within the time limit set in paragraph 4, including, where relevant, the information that no reply was submitted by the financial supervisor;
a proposed length of time of a maximum of three years, during which the Authority will exercise the relevant tasks and powers in relation to the non-selected obliged entity concerned;
a description of the measures that the Authority intends to take in relation to the non-selected obliged entity concerned upon the transfer of the relevant tasks and powers to address the serious, repeated or systematic breaches referred to in paragraph 2;
any relevant communication between the Authority and the financial supervisor concerned.
Based on the information received pursuant to paragraph 6, the Commission shall have one month from the date of receipt of the request from the Authority to adopt a duly justified decision whether to authorise the transfer of the relevant tasks and powers or to oppose it. The decision shall be notified to the Authority, which shall immediately inform the financial supervisor and the non-selected obliged entity thereof. The European Parliament and the Council shall be informed of the decision.
On the tenth working day after the decision authorising the transfer of tasks and powers in relation to the non-selected obliged entity has been notified to the Authority, the non-selected obliged entity shall be deemed a selected obliged entity for the purposes of the exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23. The Commission decision shall set a time limit for the exercise of those tasks and powers, upon the expiry of which they shall be automatically transferred back to the financial supervisor concerned.
After having consulted the financial supervisor concerned, the Authority may submit to the Commission a request to extend the application of the decision authorising the transfer of tasks and powers. That request shall be submitted at least two months before the expiry of the initial period.
The request referred to in the first subparagraph shall be accompanied by the following:
a description of the measures that the Authority has taken in relation to the obliged entity concerned and of the further measures it intends to take;
a justification as to why those remaining measures address breaches that still fall within the scope of competence of the Authority, pursuant to paragraph 2;
a proposed length of time of a maximum of three years for the continued exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23 in relation to the obliged entity;
any relevant communication between the Authority and the financial supervisor concerned.
The Commission shall adopt a decision whether to grant the extension within the time limit indicated in paragraph 7. Any extension granted pursuant to this paragraph may be granted only once.
Springlex and this text is meant purely as a documentation tool and has no legal effect. No liability is assumed for its content. The authentic version of this act is the one published in the Official Journal of the European Union.
Definition
crypto-asset services
Definition
supervisor
Definition
financial mixed activity holding company
Definition
non-selected obliged entity
Definition
crypto-asset service provider
Definition
credit institution
- a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013;
- a branch of a credit institution, as defined in Article 4(1), point (17), of Regulation (EU) No 575/2013, when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
parent undertaking
- for groups whose head office is located in the Union, an obliged entity that is a parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU that is not itself a subsidiary of another undertaking in the Union, provided that at least one subsidiary undertaking is an obliged entity;
- for groups whose head office is located outside of the Union, where at least two subsidiary undertakings are obliged entities established in the Union, an undertaking within that group established in the Union that:
- is an obliged entity;
- is an undertaking that is not a subsidiary of another undertaking that is an obliged entity established in the Union;
- has a sufficient prominence within the group and a sufficient understanding of the operations of the group that are subject to the requirements of this Regulation; and
- is given the responsibility of implementing group-wide requirements under Chapter II, Section 2 of this Regulation;
Definition
selected obliged entity
Definition
crypto-asset
Definition
property
Definition
group
Definition
financial institution
- an undertaking other than a credit institution or an investment firm, which carries out one or more of the activities listed in points (2) to (12), (14) and (15) of Annex I to Directive 2013/36/EU of the European Parliament and of the Council(32), including the activities of currency exchange offices (bureaux de change), but excluding the activities referred to in point (8) of Annex I to Directive (EU) 2015/2366, or an undertaking the principal activity of which is to acquire holdings, including a financial holding company, a mixed financial holding company and a financial mixed activity holding company;
- an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council(33), insofar as it carries out life or other investment-related assurance activities covered by that Directive, including insurance holding companies and mixed-activity insurance holding companies as defined, respectively, in Article 212(1), points (f) and (g), of Directive 2009/138/EC;
- an insurance intermediary as defined in Article 2(1), point (3), of Directive (EU) 2016/97 where it acts with respect to life insurance and other investment-related insurance services, with the exception of an insurance intermediary that does not collect premiums or amounts intended for the customer and which acts under the responsibility of one or more insurance undertakings or intermediaries for the products which concern them respectively;
- an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU of the European Parliament and of the Council(34);
- a collective investment undertaking, in particular:
- an undertaking for collective investment in transferable securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC and its management company as defined in Article 2(1), point (b), of that Directive or an investment company authorised in accordance with that Directive and which has not designated a management company, that makes available for purchase units of UCITS in the Union;
- an alternative investment fund as defined in Article 4(1), point (a), of Directive 2011/61/EU and its alternative investment fund manager as defined in Article 4(1), point (b), of that Directive that fall within the scope set out in Article 2 of that Directive;
- a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council(35);
- a creditor as defined in Article 4, point (2), of Directive 2014/17/EU of the European Parliament and of the Council(36) and in Article 3, point (b), of Directive 2008/48/EC of the European Parliament and of the Council(37);
- a credit intermediary as defined in Article 4, point (5), of Directive 2014/17/EU and in Article 3, point (f), of Directive 2008/48/EC, when holding the funds as defined in Article 4, point (25), of Directive (EU) 2015/2366 in connection with the credit agreement, with the exception of the credit intermediary carrying out activities under the responsibility of one or more creditors or credit intermediaries;
- a crypto-asset service provider;
- a branch of a financial institution referred to in points (a) to (i), when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
third country
Definition
funds