Recently AMLA published three draft regulatory technical standards (RTS). A previous version of these draft standards was consulted before by EBA in 2025. Now AMLA consults the standards to ensure that the non-financial sector’s views are fully captured.
One of the draft standards that was consulted is the draft RTS on pecuniary sanctions, administrative measures and periodic penalty payments. This draft RTS got little attention from the respondents in the previous EBA consultation.
Alignment on underlying legal frameworks needed for successful harmonisation
The goal of this draft RTS is to ensure that the same AML/CTF breach is assessed in the same way by all supervisors across EU Member States. This will prove difficulty given the current divergence in legal qualification and enforcement of AML/CFT breaches across EU Member States.
In the Netherlands we have seen serious criminal enforcement against large Dutch Banks and its executives for AML/CFT non-compliance. Under Dutch law AML/CTF breaches can constitute an economic crime, even if the breaches were committed unintentionally or in negligence. By contrast, in several other EU Member States, even intentional breaches are handled administratively. Achieving genuine harmonisation in the sanctioning of AML/CTF breaches will require alignment of the underlying legal frameworks across Member States, including both breaches that are handled administratively, and those that qualify for criminal enforcement. Furthermore, AMLA faces a more fundamental question: should criminal enforcement be an option for this type of regulatory legislation?
Lack of cooperation as an aggravating circumstance & article 6 EHRM
The draft RTS proposes a three-step approach for the assessment of AML/CTF breaches. In step 1 the national supervisor will assess the level of gravity of the breach. Step 2 is to classify this level of gravity in one of four categories. In the third step the supervisor must determine the level of pecuniary sanctions or administrative measures.
One of the factors to be considered in this third step is the level of cooperation from the natural person or legal entity responsible. A lack of cooperation during a supervisory examination is stipulated as an aggravating circumstance and leads to a higher pecuniary sanction. This would make sense in case a subject hinders the supervisory investigation, but the criterium is formulated much broader which creates tension with article 6 EHRM.
Article 6 ECHR sets the framework for a fair trial in the event of a criminal charge. It’s important to note that a pecuniary sanction will, in most cases, qualify as a ‘criminal charge’ under article 6 ECHR. This means that individuals entities subject to such proceedings will have the right to restrict their cooperation, ensuring they are not required to actively contribute to their own prosecution. This principle, known as nemo tenetur, establishes that a suspect is not obliged to answer questions if doing so would lead to self-incrimination. Consequently, not every instance of limited cooperation should automatically be treated as an aggravating circumstance. We recommend that AMLA expressly clarifies this point in its draft regulatory standards before submitting them to the EU Commission, so that the rights of individuals and entities are properly safeguarded.
Potential benefit as a factor for the level of pecuniary sanctions?
Next to the level of cooperation and other relevant factors, the draft RTS issued by AMLA mentions the benefit that comes from an AML/CTF breach as an aggravating circumstance. However, The language used in the draft RTS is not entirely clear, as it refers to benefit “insofar as it can be determined”, implying actual benefit, while also appearing to suggest that potential benefits may be taken into account. It is important to note that the draft RTS does not specify whether a benefit might include cost savings; instead it refers to the avoidance of any loss. That is noteworthy because breaches of AML/CTF obligations may result from insufficient investment in the effectiveness or quality of anti-money laundering and counter-terrorist financing systems and controls.
How we can help
If you have questions about how the AMLR will affect your business, or if you need tailored guidance on compliance matters, please do not hesitate to contact us or any member of our Corporate Crime & Business Integrity team.
