23rd June 2023
The Financial Intelligence Analysis Unit (FIAU) would like to notify subject persons that the European Banking Authority (EBA) has recently published the following documents:
1. Consultation on Amendments to the Guidelines on ML/FT Risk Factors:
The European Banking Authority (EBA) has published a consultation paper containing amendments to its Guidelines on money laundering and terrorist financing (ML/TF) risk factors.
The changes being proposed extend the scope of the guidelines to crypto-asset service providers (CASPs). Their aim is to set common, regulatory expectations of the steps CASPs should take to identify and mitigate ML/FT risks effectively.
These guidelines shed light on factors that may indicate what the CASP’s exposure to higher or lower ML/TF risk are, and state how CASPs should adjust their customer due diligence in line with those risks. In addition, the amendments include guidance to other credit and financial institutions on risks to consider when in a business relationship with a CASP, or when they are otherwise exposed to crypto assets.
More information on the draft guidelines, including the consultation paper, may be found on the EBA’s website.
This consultation runs until 31 August 2023, and any comments or feedback to the draft Guidelines can be sent directly to the EBA by clicking on the “send your comments” button on the EBA’s consultation page.
2. Report on ML/TF Risks associated with Payment Institutions:
The European Banking Authority (EBA) has published its Report on ML/TF risks associated with EU payment institutions whereby it emerged that ML/TF risks in the sector are not consistently assessed and managed effectively, both by the payment institutions as well as by their supervisors.
It appears that payment institutions frequently have insufficient internal controls in place to effectively mitigate these risks, despite the sector itself being highly vulnerable to these activities. This may impact the integrity of the EU’s financial system.
The EBA’s results indicate that some competent authorities are not adequately overseeing the sector, leading to the presence of payment institutions with inadequate AML/CFT controls in the EU.
A number of these findings are connected to matters that are covered in the EBA Guidelines. The EBA emphasizes that it is crucial to tackle these aspects to safeguard the EU’s single market against financial crime. Furthermore, this action will help improve access by payment institutions to payment accounts by addressing the underlying issue leading to de-risking.
Subject persons can access the document from the FIAU website, or through the EBA website.