EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT). EC had issued this call for advice to EBA, on March 03, 2020, with the aim to define the scope of application and the enacting terms of a regulation to be adopted for preventing money laundering and terrorist financing. In its response, EBA sets out ways to strengthen the legal framework on AML/CFT and recommends that EC should establish a Single Rulebook, with a robust set of common rules supporting the implementation of a proportionate and effective risk‐based AML/CFT regime.
The following are the key highlights of the EBA recommendations to EC:
- Harmonize the EU legal framework in a directly applicable regulation where evidence suggests that divergence of national rules and practices has had a significant, adverse impact on the prevention of the use of the financial system in EU for money laundering and terrorist financing purposes
- Strengthen aspects of the current AML/CFT Directive where existing provisions are insufficiently robust or specific—for example, in relation to supervisory powers of competent authorities in this area
- Review scope of the EU AML/CFT legislation to ensure that the list of obliged entities is sufficiently comprehensive and well‐defined and is in line with the international AML/CFT standards; examples of sectors that are not included or whose status under the current AML/CFT directive is unclear include virtual asset service providers, investment firms, and investment funds
- Clarify provisions in sectoral financial services legislation to ensure that they are compatible with the AML/CFT objectives of EU, for example, by ensuring that money laundering and terrorist financing risk is addressed consistently across all sectors and throughout the supervisory process
This response complements the response of EBA to the EC consultation on AML/CFT action plan, which advises on how to be effective and efficient in establishing a new EU AML/CFT supervisor by building on the existing AML/CFT infrastructure.
Keywords: Europe, EU, Banking, AML/CFT, Action Plan, ML/TF Risk, Single Rulebook, Operational Risk, Basel, EC, EBA
Previous ArticleHKMA Updates Policy Module for Non-Centrally Cleared OTC Derivatives
The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.
The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.
The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.