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Luxembourg enters race to host EU dirty money watchdog
Money laundering

Luxembourg enters race to host EU dirty money watchdog

by John MONAGHAN 2 min. 17.01.2023
As home to several EU institutions, Grand Duchy is natural location for the new anti-money laundering authority, Finance Minister Yuriko Backes says
The Kirchberg area is home to several EU institutions in Luxembourg
The Kirchberg area is home to several EU institutions in Luxembourg
Photo credit: LW archive

Luxembourg will enter the crowded race to host the EU’s proposed new anti-money laundering watchdog, Finance Minister Yuriko Backes has said, in a bid to strengthen the capital’s status as a key hub for the bloc’s institutions.

The planned Anti-Money Laundering Authority (AMLA) is set to act as a central oversight body for the EU, with powers to directly supervise financial institutions considered risky, according to a directive from the bloc.

Six EU countries – Germany, France, Italy, Lithuania, Latvia and Austria – have already declared an interest in hosting the new agency.

Although the formal process for selecting a venue has not begun, Luxembourg will be putting itself forward as a candidate, Backes said in response to a written parliamentary question on Monday from LSAP deputy Dan Biancalana.

“Luxembourg, like several other member states, has signalled its interest in hosting the future European agency in charge of the fight against money laundering and the financing of terrorism,” Backes said.

The fact that several other key EU bodies, such as the bloc’s fraud-fighting agency, the European Public Prosecutor’s Office (EPPO), are headquartered in Luxembourg would make the country a natural fit, Backes added.

EU Commissioner Mairead McGuinness has said AMLA would not be fully operational for another three years
EU Commissioner Mairead McGuinness has said AMLA would not be fully operational for another three years
AFP

AMLA is still several years away from being fully operational, Mairead McGuinness, the EU’s financial services commissioner, told a conference in Luxembourg in September.

The plan is for it to “get off the ground in 2024, to reach full staffing in 2025 and to start carrying out direct supervision in 2026”, McGuinness said. "I want to urge the co-legislators to move as fast as they can".  

Luxembourg's bid comes as Belgium has proposed plans to consolidate Brussels' position as the EU capital, in the face of competition from Luxembourg and Strasbourg, by creating a dedicated 'European Quarter 2030' unit, according to internal documents cited in Belgian media reports in December.

Although Luxembourg became the first home for Europe’s fledging common institutions in the 1950s, it missed the opportunity to establish itself as the bloc's permanent capital as the decades progressed.  

In 1992, the EU fixed Strasbourg as the seat of the Parliament, and Luxembourg’s status was dealt another blow as Brussels conceded for the first time that it was time other countries also needed a piece of the cake. 

The location of any other bodies or departments “set up or to be set up” in the future would be “decided by common agreement” between countries with “appropriate priority to member states who do not at present provide the sites for community institutions”.  

While Luxembourg became the location for the European Stability Mechanism (ESM) and the European Public Prosecutor’s Office (EPPO), it missed out on the European Central Bank (ECB) and the EU’s law enforcement agency Europol.


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