The successful bid for the AMLA underscores the city's capacity to pull together in the face of intense competition
There was loud cheering in Frankfurt when 27 EU member states and the European parliament bestowed upon the city the prestigious honor of hosting the new European Anti-Money Laundering Authority (AMLA), in a decision announced by the Belgian Council Presidency. The triumph represents a significant win for the financial epicenter, beating out eight other prominent European cities.
AMLA will oversee the 40 largest financial institutions, law firms and management consultants in the EU. It will bring around 400 well-paid jobs to the city. The officials are due to start work in July 2025.
Three buildings in Frankfurt are the prime candidates to house the new authority - two skyscrapers in the city centre (Messeturm, Tower 185) and the Flow office building at Frankfurt Airport. According to Frankfurt's Lord Mayor Mike Josef, they are fully primed for use and could be occupied immediately.
EU Commission Vice-President Valdis Dombrovskis congratulated Frankfurt and declared that the new authority would be a "game changer" in the fight against money laundering and terrorist financing.
The establishment of the AMLA in Frankfurt comes at a critical juncture for the city. Despite challenges from other European contenders, Frankfurt's success in securing this institution solidifies its position as the preeminent financial center in the EU.
EU fight against money laundering
The EU finalised the establishment of the new authority in December last year as part of a larger legislative amendment in the fight against money laundering in the EU. The amended law also stipulates a cash limit of 10,000 euros, for example. The AMLA is intended to supervise around 40 of the largest financial institutions that are considered particularly susceptible to money laundering, as well as a few large law firms that have come to light in cases such as the "Pandora Papers". Institutions categorised as less risky will continue to be supervised by national authorities, for the moment.
In the context of the decision-making process, the complexity of the selection became apparent as the European Parliament was granted a say in a location decision for the first time. Frankfurt secured the narrowest conceivable majority of 28 votes in a joint meeting where both member states and parliamentarians had equal representation.
The selection process was likened to the "Eurovision Song Contest", adding a layer of intrigue to Frankfurt's triumph. Prior to the final joint meeting, the EU member States and the Parliament had already decided on their favourites separately. In the first round in the Council of Member States, each government could choose three cities and award three, two and one point respectively. At the end of this round, Frankfurt was already clearly in the lead.
Decision welcomed by local and national governments
The German government and German MEPs welcomed the decision. CSU parliamentarian Markus Ferber spoke of a "great honour" for Frankfurt. The proximity of the new authority to the European Central Bank was an "unbeatable advantage". Adding weight to the location decision was Frankfurt's success - on a much larger scale - not only in locating an EU institution in its city (the ECB), but also in integrating it and its employees into the entire region.
Green MEP Rasmus Andresen said that the vote was a "leap of faith so that Germany can catch up with other member states in the fight against money laundering". This was a reference to a recent international ranking by the Financial Action Taskforce on Anti-Money Laundering (FATF), in which Germany had recently performed poorly in the fight against money laundering. However, Finance Minister Christian Lindner had promised improvement and set up a new German authority to combat money laundering.
Contribution of Lindner and mayor Mike Josef seen as decisive
The successful bid for the AMLA underscores the city's capacity to pull together in the face of intense competition. The involvement of Finance Minister Christian Lindner and the heart-and-soul commitment of Frankfurt's Lord Mayor Mike Josef showcased a united front from both federal and local leadership, emphasizing the efficiency of the region as a whole. Mike Josef's leadership in rallying support for Frankfurt will likely serve as a model for future endeavors, showcasing the city's ability to mobilize resources effectively.
Hesse's Minister President Boris Rhein (CDU) said that the city, state and federal government had fought together for this decision. According to Rhein, the success in the competition for the AMLA, following the success in the race for the International Sustainability Standards Board (ISSB), shows once again: "When all levers in our federal system pull together, Germany is strong."
While the decision promises economic growth and enhanced global recognition for Frankfurt, concerns were voiced regarding the competitive labor market for anti-money laundering experts. Frankfurt's financial circles are already highly competitive, and the addition of the AMLA may intensify the battle for skilled professionals. However, the overall impact should still remain positive, contributing to the city's economic prosperity and attractiveness on the global stage.
REFIRE: Frankfurt's triumph in securing the AMLA reaffirms its standing as a financial powerhouse within the European Union. The decision not only brings prestige but also promises tangible economic benefits and growth for the city. As Frankfurt prepares to host this pivotal anti-money laundering authority, it sets the stage for continued success and reinforces its role as a key player in shaping the financial landscape of the European Union. The collaborative efforts of political leaders and the city's ability to showcase its strengths have given a further boost to Frankfurt’s hopes of a prosperous future in the ever-evolving realm of international finance.
