The European Anti-Money Laundering Authority's Headquarters Dilemma

On 22 February, the European Parliament and Council are expected to vote on the headquarters for the EU's Anti-Money Laundering/Countering the Financing of Terrorism Authority (AMLA), with nine European capitals in the race to host AMLA: Brussels, Dublin, Frankfurt, Madrid, Paris, Riga, Rome, Vienna and Vilnius. The two institutions have established a set of criteria to guide their selection of the host city for AMLA.

Among the considerations is each member state's approach to addressing financial crime risks, with scrutiny drawn from publicly available and comparable sources like the Financial Action Task Force’s (FATF) reports. This focus became evident during the joint public hearings on 30 January, where representatives from candidate cities were asked not only to address some of the findings from their countries’ FATF Mutual Evaluation Reports, but also to respond to reputational concerns, such as their countries' financial ties to Russia.

These factors aside, several other key considerations are likely to influence the decision-making process. These include the operational readiness of the future premises of AMLA, its national and international accessibility, the availability of essential services for AMLA staff and their families, and the widely-explored importance of geographical balance in the EU’s institutional decentralisation. Other criteria include the building's staff capacity, the number of meeting rooms, as well as financial considerations such as monthly rent and fit-out expenses. Additionally, evaluations will include factors such as accessibility by public transport, commute times to the premises, nearby hotel accommodation, and the availability of essential amenities like nurseries, schools and universities.

Between the nine candidates, there are 18 potential premises, each with a supporting application. These applications provide valuable insights and avenues for comparing and analysing them against at least 30 diverse technical criteria, facilitating a deeper assessment of how each premises stacks up against the others. These criteria seem to be aligned to three core principles which should ultimately help to determine the successful city:

a) Favouring abundance: This means that a higher quantity is advantageous. For instance, a candidate offering more parking spaces or hotels nearby would rank higher.

b) Valuing speed: Faster options are preferred. For example, a candidate with shorter travel times from the airport to the AMLA premises would rank higher.

c) Preferring lower costs: Candidates with lower expenses are preferred. For instance, a candidate with lower monthly rent costs would rank higher.

The ranking process follows a first-to-last choice methodology. For instance, the first choice would be the premises with the lowest average yearly costs, while the last choice would be the one with the highest costs. In a situation where two premises offer equally low yearly costs, both would be placed first. Deeper analysis and additional insights can be found on this LinkedIn page.

In summary and as anticipated, the analysis reveals a nuanced landscape, with each of the 18 proposed premises presenting unique advantages and drawbacks. This indicates that selecting the best option will be challenging. For instance, Madrid and Brussels emerge as frontrunners in terms of swift fit-out and prompt availability by Q2 2024. Should AMLA prefer a high-rise building, Frankfurt and Paris offer notable options with approximately 50 floors each, alongside ample parking space for up to 400 employees. Dublin showcases two buildings capable of accommodating 600 staff each, featuring internal archive facilities equivalent to roughly three shipping containers and with substantial potential for future expansion. In the Baltics, one of Riga's premises stands out for its capacity to house up to 750 staff and its plethora of meeting rooms, including six rooms capable of hosting more than 40 people.

Unsurprisingly, locating AMLA in Western Europe would likely incur higher costs to the taxpayer compared to more economical options in the Baltic and southern member states. For instance, monthly rents in Dublin (€708,750) and Frankfurt (€587,600) top the list, while Madrid, Riga, Rome and Vilnius offer rents below €150,000. Dublin's setup costs – primarily fit-out expenses – could range from €36-49 million, contrasting sharply with Vilnius and Brussels, where costs could be as low as €2 million and €1.5 million, respectively.

Europe's economic and political hubs often double as crucial international transport centres. Cities like Frankfurt, Paris and Brussels boast extensive and well-established national and international transport networks, placing them at the forefront of connectivity in Europe and giving them a competitive edge. The analysis of applications indicates that these three cities present the most compelling offers on paper, which perhaps also explains why the majority of EU institutions are clustered there. Therefore, it appears logical for AMLA to be headquartered in one of these cities given the attractiveness of their proposals despite some inherent drawbacks.

However, while we can delve into each criterion extensively, it is unlikely that technical details alone will dictate the final outcome. Ultimately, political influence will likely play a significant role, as each candidate city will undoubtedly leverage its political clout to sway the votes in its favour. Reports suggest that conversations behind closed doors have already taken place suggesting that, if the former first deputy prime minister of Spain, Nadia Calviño were to assume the position of Head of the European Investment Bank (EIB), Madrid would have ‘significantly less’ chance of becoming the host city of AMLA. Given that her appointment to the EIB occurred on 1 January, does this imply an informal consensus that Madrid is no longer in the game and may instead support another city, such as Frankfurt? If decisions behind closed doors take precedence, how much weight do the technical criteria truly carry and what are the realistic chances, for instance, of political underdogs such as Riga or Vilnius being selected?

We should soon discover whether the imperative for geographical balance will prevail, particularly if the EU is genuinely committed to decentralising its institutions and moving away from the politically dominant Brussels–Frankfurt–Paris axis. Consequently, politically safer options such as Dublin, Madrid or Rome could become leading contenders for AMLA's location, while cities like Riga, Vienna and Vilnius might require time to fortify their positions against more established counterparts, both politically and technically. This assumes that any informal agreements, which are likely underway behind the scenes, have not already determined the location of AMLA.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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