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
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.