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    EBA Proposes Guidelines on Role of AML/CFT Compliance Officers

    August 02, 2021

    The European Banking Authority (EBA) proposed guidelines on the role, tasks, and responsibilities of anti-money laundering (AML) and countering the financing of terrorism (CFT) compliance officers and the management body. The draft guidelines address the AML and CFT governance setup at the EU level. The guidelines include provisions on the wider AML and CFT governance setup, including at the level of the group. Once adopted, the guidelines will apply to all financial-sector operators that are in the scope of the AML Directive. The feedback period on this proposal ends on November 02, 2021.

    The proposed guidance stipulates that the AML and CFT compliance officers need to have sufficient seniority, which entails the powers to propose all necessary or appropriate measures to ensure the compliance and effectiveness of the internal AML and CFT measures to the management body, in its supervisory and management function. The draft guidelines also specify the tasks and role of the member of the management board, or the senior manager where no management board exists. As information reaching the management body needs to be sufficiently comprehensive to enable informed decision-making, the draft guidelines set out the minimum information that should be included in the activity report of the AML and CFT compliance officer to the management body. Where a financial services operator is part of a group, the draft guidelines provide that a Group AML and CFT compliance officer in the parent company should be appointed to ensure the establishment and implementation of effective group-wide AML and CFT policies and procedures and to ensure that any shortcomings in the AML and CFT framework affecting the entire group or a large part of the group are addressed effectively.

    Through these guidelines, EBA intends to achieve a common understanding, by competent authorities and financial sector operators, of financial sector operators’ AML and CFT governance arrangements. A common understanding, which is applied consistently and enforced as necessary, will be key to strengthening the AML and CFT defenses in EU. Provisions in the draft guidelines are designed to be applied proportionately while considering the diversity of financial sector operators that are within the scope of the AML Directive. They are also in line with the existing guidelines from the European Supervisory Authorities (ESAs), which include the revised guidelines on internal governance under the Capital Requirements Directive (CRD); the revised Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body; the draft guidelines on the authorization of credit institutions; and the draft guidelines for common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing. 

     

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    Comment Due Date: November 02, 2021

    Keywords: Europe, EU, Banking, Securities, AML/CFT, Governance, AML Directive, ESAs, Compliance Risk, AMLD, Compliance Risk, EBA

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