The European Union (EU) has approved the creation of a new anti-money-laundering watchdog, a move aimed at closing loopholes for illicit cash flows in the 27-member union. 

The Council of the European Union, a legislative body, said that it had adopted a package of anti-money-laundering measures, including one creating a Frankfurt-based authority to oversee the most high-risk financial entities. 

The agency, to be called the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), will start its work in mid-2025, and will have direct supervisory powers over some finance companies, the Council said. The new agency will also be empowered to levy fines. 

The package also extends anti-money-laundering rules to new entities, including crypto firms and soccer clubs, and tightens due diligence requirements. Europe will also centralize banking records in a single database accessible to law enforcement, the Council said. 

AMLA will also coordinate the efforts of EU member countries’ financial intelligence units.  

The package has been in the works since 2021, when the European Commission, the bloc’s executive body, presented a package of legislative proposals. The European Parliament approved the measures in April. 

In the U.S., the Treasury Department’s Financial Crimes Enforcement Network has a central role in anti-money-laundering efforts. In Europe, however, efforts to stop financial crime have been comparatively fragmentary, with member states largely in charge of enforcement. 

The measures passed harmonize Europe’s rules against money laundering throughout the bloc.