EBA published its response to the action plan of EC for a comprehensive EU policy on preventing money laundering and terrorism financing (ML/TF). In this action plan, which was published in May 2020, EC set out its view of a future framework for anti-money laundering and countering the financing of terrorism (AML/CFT). Through this response, EBA provides technical points that policy-makers should consider when deciding on the scope and powers of an EU-level supervisor for AML/CFT. EBA is of the view that a comprehensive assessment of the existing AML/CFT framework in EU is necessary to ensure that EU and its component parts are equipped to tackle money laundering and terrorist financing more effectively and efficiently.
EBA recommendations to EC include the following:
- Harmonize the legal framework for AML/CFT in EU to reduce the risk of gaps created by divergent approaches to incorporating EU AML/CFT law into national law (EBA to provide more information on this in its response to the EC Call for Advice on September 0, 2020)
- Combine an ongoing role of national AML/CFT authorities with an EU-level AML/CFT supervisor in a hub-and-spoke approach that builds on national AML/CFT authorities’ expertise and resources, complementing this with effective EU-level oversight for a consistent approach with comparable outcomes
- Leverage on the existing AML/CFT infrastructure of EU, including the policy of EBA, data and information technology resources, and the European and international supervisory cooperation networks of EBA
EC action plan builds on six pillars, namely effective implementation of existing rules, a single EU rulebook, an EU-level supervision, a support and cooperation mechanism for financial intelligence units, better use of information to enforce criminal law, and a stronger EU in the world. EC intends to deliver on these actions by early 2021. EBA states that it stands ready to provide technical input and support EC in its implementation of this action plan. EBA will provide additional technical input through its forthcoming response to a separate Call for Advice of EC, in which EBA has been asked to define the scope of application and the enacting terms of a regulation to be adopted in the field of preventing money laundering and terrorist financing. EBA will respond to this Call for Advice by September 10, 2020.
Keywords: Europe, EU, Banking, AML/CFT, Action plan, ML/TF Risk, Single Rulebook, Operational Risk, Basel, EC, EBA
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