Lithuania challenges Western capitals for hosting EU’s Anti-Money Laundering Authority

From Madrid to Vilnius, EU countries are vying to host the European Anti-Money Laundering Authority (AMLA). Lithuania has already chosen its premises, boasts of its abundance of financial professionals, and argues that if the institution were to be based in Vilnius, it would create more well-paid jobs in the city, which might even encourage Lithuanians working abroad to return home. 

The European Commission has received applications from nine cities: Brussels, Dublin, Frankfurt, Madrid, Paris, Rome, Riga, Vienna, and Vilnius.

The Spanish capital Madrid is the favourite in the foreign media, but according to Lithuania’s Deputy Finance Minister Mindaugas Liutvinskas, the number of EU institutions already operating in the country will be taken into account.

“The European Parliament, to my knowledge, gives high priority to geographical balance. This means that we should not concentrate all important institutions in the same few Western European countries,” he said.

There are currently four EU agencies in Spain and only one in Lithuania – the European Institute for Gender Equality, established in 2007.

However, this is only one aspect, and there are strict criteria for the applicant countries, Eva Maria Poptcheva, vice-chair of the EP’s Committee on Economic and Monetary Affairs, told LRT.lt.

Around 500 workers

In addition to the well-known institutions in Brussels, Luxembourg, and Strasbourg, the EU also has a number of agencies in various countries coordinating issues ranging from human rights to cyber security.

For example, the Frontex border agency operates in Warsaw and the European Centre for Disease Prevention and Control is based in Stockholm.

The specific shape and budget of the AMLA will become clear once the mandate of the agency is finalised, but it is expected to employ at least 400-500 people.

“The establishment of such an institution could also encourage some of the Lithuanian experts working abroad to return to Vilnius, join the institution’s team and thus come back to live in Lithuania,” Liutvinskas said.

However, as in other EU agencies, the majority of the staff will be selected from across Europe via a competitive hiring process.

Modern office and nature

Countries applying to host the AMLA had to identify their strengths in the application and describe what they could offer to the workers and their families who would settle there.

“The criteria range from the accessibility of the city, job opportunities, and access to schools for children to the availability of highly qualified workers,” said Spanish MEP Poptcheva, who is in charge of the AMLA.

Vilnius is described in the questionnaire as a green city, where “almost half of the city is covered by parks, squares, and forests, so everyone can be in nature without leaving the city or even the Old Town”.

Another advantage is that Vilnius Airport is just a few kilometres from the city centre. Flights to the EU’s main cities are already easily accessible and Lithuania is working to expand the list of destinations, the application reads.

According to Deputy Finance Minister Liutvinskas, Vilnius’ size could also be an advantage.

“Vilnius has the distinctive feature of being one of the greenest capitals, offering a good quality of life at a competitive price compared to other Western capitals,” he said.

The publicly available application specifies that AMLA’s headquarters would be established at the Yellowstone Business Centre, located close to Lukiškės Square and the Seimas.

Lithuania would commit to partially cover the rent of the office for five years. Liutvinskas did not disclose the amount in question but stressed that it is “manageable for the state budget”.

Money laundering problem

According to Poptcheva, the need for an anti-money laundering authority in the EU emerged from the realisation that the bloc does not have many tools at its disposal to combat financial crime.

“We have quite a big money laundering problem in the EU. There is a single market, so it is important to have the same standards across the EU because once money enters and circulates in the single market, it is very difficult to capture it,” the MEP said.

According to her, the agency would directly supervise some of the riskiest financial entities and monitor the work of national authorities.

Lithuania has the advantage of not having been involved in money laundering scandals recently, unlike other countries in the region, said Liutvinskas. The country also has a large number of specialists who have experience not only in traditional banking but also in the fintech sector, he added.

“Both this and last year’s Basel Index rank Lithuania among the 10 countries with the lowest [money laundering] risk globally. This shows that our experience and expertise in risk management would enrich the new institution and is an important factor,” said the deputy finance minister.

Decision next year

The EC is expected to evaluate the applications in December and the EP will hold public hearings next year, where the candidate countries will try to prove that they are the best candidates to host the AMLA.

“This is the first time that the EU Council and Parliament will decide together where the institution will be located. Until now, this has been done only by the countries in the Council, in a process that has not been transparent, but the European Court of Justice has ruled that the process must be carried out with the European Parliament involved,” said MEP Poptcheva.

For Lithuania and other smaller EU countries, a more transparent process is an advantage, according to Liutvinskas. The AMLA will be set up in phases, and the first unit will be operational in 2025, he said.