McNamara Seeks Clarity and Impact Assessment on EU's AML High-Risk Third Country Rules
MEP Michael McNamara (Renew) has thrown a spotlight on the Commission's approach to regulating entities relying on outsourced and cloud services from high-risk third countries concerning anti-money laundering (AML) and counter-terrorist financing (CFT). His questioning targets both the practical implications for businesses tangled in cross-border operations and the potential disruption to economic flows, highlighting the stakes for financial institutions, regulators, and businesses engaged in international trade including remittances and correspondent banking.
Context of the Parliamentary Question
The inquiry, posed as a parliamentary question on 10 October 2025, directly challenges the Commission regarding the recent amendment to Delegated Regulation (EU) 2016/1675 (amended in 2025/1184), which reclassifies several countries as high-risk in AML/CFT regimes. McNamara's questions aim at uncovering the Commission’s plans to manage outsourcing dependencies, supervisory guidance, and conducting thorough impact assessments.
Absence of Hard Numerical Targets; Focus on Supervisory Guidelines
The Commission, through Ms Albuquerque, responded that while enhanced due diligence remains mandatory, outsourcing to third parties in high-risk countries is restricted—with exceptions for branches or subsidiaries under conditions. The Anti-Money Laundering Authority (AMLA) will generate supervisory guidelines to clarify responsibilities and ensure consistency across the EU. Notably, AMLA is tasked with cost-benefit analyses to keep measures proportionate but no specific numerical targets or deadlines are outlined.
Balancing Stringent Oversight with Proportionality
The stance prioritizes increasing regulatory oversight on outsourcing and clarifying roles to avoid AML/CFT risks associated with cross-border dependencies, while simultaneously embedding proportionality via cost-benefit assessments to minimize undue disruption on legitimate business activities.
Banks, Businesses, Regulators, and Consumers
Financial institutions and businesses may face greater compliance burden and operational constraints, especially in managing outsourcing contracts with high-risk countries, possibly raising costs and limiting partnerships. Regulators gain clearer frameworks to supervise and enforce AML standards, potentially elevating scrutiny levels. Consumers and remittance senders might experience indirect impacts through challenges in cross-border financial services, including risks of de-risking or financial exclusion.
AMLA's Guidelines and Impact Analysis as Crucial Signals
The European Commission’s answer highlights that AMLA’s forthcoming guidelines and analyses will be instrumental in shaping how outsourcing practices are supervised, signaling the direction of EU regulatory policies on AML/CFT risks linked to high-risk third countries. Responses are expected within weeks, providing critical insight into future institutional priorities.
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