Brussels is currently experiencing a unique election campaign: the location for the future EU Anti-Money Laundering Authority (AMLA) is at stake. In large letters, the Irish and Baltic nations advertise their hometowns at the airport and in downtown Brussels. On the internet, governments compete with image videos promoting convenient flight connections to the candidate cities. In the Brussels European Quarter, ministers strive to gather support for the financial centers in their home turf through direct interactions with diplomats from other EU states and Members of the European Parliament.

The unusual engagement is understandable for two main reasons. Firstly, it involves one of the larger EU agencies. According to current plans, the AMLA will, at its full capacity, be four times larger than many other EU units, such as the EU Monitoring Centre for Drugs and Drug Addiction or the European Foundation for the Improvement of Living and Working Conditions. Secondly, the city where the anti-money laundering authority will be established can gain an advantage in the competition for financial centers, as banks value short distances to their supervisory authorities.

Nine countries have thrown their hat into the ring: Italy for Rome, France for Paris, Spain for Madrid, Ireland for Dublin, Lithuania for Vilnius, Latvia for Riga, Austria for Vienna, Belgium for Brussels, and Germany for Frankfurt. Assessments of who has the best chance of winning vary. This is mainly because, based on a ruling by the European Court of Justice, the decision on the location is no longer solely in the hands of government leaders but involves the European Parliament. Although the exact process is still unclear.

Hearings were initially scheduled for December, but in Brussels, it is now considered unrealistic that they will take place before Christmas. The actual showdown for the EU authority is expected to begin in January under the Belgian EU Council Presidency.

Regarding Madrid's application, diplomats and EU officials point out that Spain is also vying for the leadership position of the European Investment Bank. If Minister of Economy Nadia Calviño is chosen as the successor to EIB President Werner Hoyer, the chances of also securing the AMLA bid are likely to decrease significantly. Brussels' candidacy is seen as a mandatory entry without deeper ambitions, while Vilnius and Riga are considered outsiders at best. The applicants with promising prospects are Vienna, Dublin, and Rome, along with Paris and Frankfurt.

The financial hub on the Main River can boast several advantages, from being the largest IT hub in Europe – since Big Data is especially relevant for combating money laundering – to serving as a European airport hub and having more than 50 international schools. Additionally, the proximity of other supervisory authorities and standard setters like ECB, EIOPA, BaFin, Bundesbank, and ISSB within Frankfurt's city limit is deemed beneficial.

However, the fact that EU agencies are already located in Frankfurt is considered a drawback, as the allocation criteria emphasize a balanced distribution of EU agencies among all member states. Another potential negative factor is Germany's not-so-positive assessment by the Financial Action Task Force (FATF) regarding efficient money laundering prevention. The German government counters this argument by emphasizing its active response to FATF criticism, such as the decision to establish a central national authority in 2024.

EU diplomats believe that Frankfurt's AMLA application is "anything but a sure thing," but they still acknowledge its chances. In contrast to the tug-of-war over the European Banking Authority (EBA), whose seat was relocated from London to Paris in November 2017, the German government is not acting passively but rather aggressively and decisively in the competition for the future home of the AMLA. German Finance Minister Christian Lindner supported the submission of the application three weeks ago with a presentation in Brussels, assuring that the authority can expect everything it needs to start promptly.

Ultimately, the determination of the national government and its willingness to make concessions in other political controversies are the crucial factors in the selection of the location, according to someone closely following EU location decisions for years. While IT and transportation infrastructure or the availability of schools and childcare facilities for EU officials and their families are important, the "commitment" of government leaders and ministers, and how they behave in the lead-up to the selection and during crucial negotiation rounds, is paramount. Chancellor Olaf Scholz will likely have to offer something substantial to EU partners, according to diplomatic circles.

A clever move by the German government in the current process is demonstrating close cooperation with the Hessian state government and the city of Frankfurt. During Lindner's appearance in Brussels, he was accompanied by Hessian Finance Minister Michael Boddenberg and Frankfurt City Councillor Stephanie Wüst. She presented three office buildings as potential locations: the Messeturm, the Tower 185 located a few meters away, and the Flow building complex in Gateway Gardens, right next to Frankfurt Airport. This indicated that the new EU authority in Frankfurt could start its work promptly after a decision is made.

If, contrary to expectations, the Council and the European Parliament cannot agree on a location in January, February, or March, the EU Anti-Money Laundering Authority project could face a longer delay. If no decision is reached by early April, it will be challenging to conclude the anti-money laundering legislative package in this legislative term. A new EU Parliament will be elected, reconvening in August. It will take time to resume unfinished legislative processes and elect new rapporteurs, likely extending into 2024.