Niall Hearty of financial crime specialists Rahman Ravelli believes it could be an important step.

The European Union (EU) has agreed to create a new authority to tackle money laundering in member states.

The Anti-Money Laundering Authority (AMLA) is being formed to boost the EU's Anti-Money Laundering and Countering the Financing of Terrorism framework.

AMLA will increase coordination of the supervision of financial and non-financial sectors in the EU and ensure closer working between states' financial intelligence units. It also aims to enhance the direct supervision of high-risk and cross-border financial entities.

AMLA will have the power to directly supervise certain types of credit and financial institutions, including crypto asset service providers, if they are thought to pose a money laundering risk. It will initially be responsible for supervising up to 40 groups and entities.

Its creation is part of a package of legislative proposals produced a year ago by the European Commission; which is the law-making arm of the EU.

Until now, the EU has always relied on national regulators to enforce its rules regarding money laundering. This has often been hampered by a lack of cooperation. The creation of this new bloc-wide agency, however, should remove at least some of this problem. Having a central body with direct supervisory powers over financial institutions across the EU will be a large step forward in cleaning up the bloc's anti-money laundering reputation.

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