The EBA calls for communication to credit institutions about the relevance of AML/CFT concerns from a prudential perspective

24 July 2019

The EBA published today an Opinion on the link between money laundering and terrorist financing concerns and prudential objectives. This Opinion forms part of the EBA's ongoing work to strengthen the fight against money laundering and terrorist financing in Europe and responds to a request in the Council Anti Money Laundering Action Plan of 2018.

With this Opinion, the EBA invites prudential supervisors to send a common message to institutions that prudential supervisors factor AML/CFT issues into the prudential supervisory process and cooperate closely with AML/CFT supervisors for this purpose.

Money laundering and terrorist financing (ML/TF) can have a significant, adverse impact on an institution's safety and soundness. This is why prudential supervisors need to be aware of, and act upon, ML/TF risks, which may pose prudential risks to the institutions they supervise and in particular:

  • When considering whether to authorise an institution or when assessing proposed acquisitions of qualifying holdings;
  • As part of their ongoing supervision of institutions, for example when assessing the adequacy of an institution's governance and risk management systems; and
  • When taking corrective measures to address potential weaknesses from a prudential perspective.

The EU Council made clear in its action plan of 2018 that the link between ML/TF risk and prudential objectives means that prudential and AML/CFT supervisors must cooperate closely and share information in the discharge of their respective functions. Where institutions operate across borders, the EBA expects supervisors to cooperate with their international counterparts.

Note to the editors

  1. This Opinion forms part of the EBA's wider work to strengthen the link between prudential and AML/CFT supervision. Examples of this work include draft guidelines on supervisory cooperation for AML/CFT purposes and a multilateral agreement between the European Central Bank in its capacity as prudential supervisor and national AML/CFT supervisors. See https://eba.europa.eu/regulation-and-policy/anti-money-laundering-and-e-money. It reflects a specific request in the Council Anti Money Laundering Action Plan of 2018 https://www.consilium.europa.eu/media/37283/st15164-en18.pdf
  1.  EU legislators have also taken a number of steps to clarify and strengthen the link between AML/CFT and prudential supervision. These steps include, for example,
  • Amendments to the Capital Requirements Directive, which clarify the link between prudential supervision and AML/CFT supervision and require prudential supervisors to act on AML/CFT information; and
  • An Anti-Money Laundering Action Plan, which the Council of the European Union adopted in December 2018. In this Action Plan, the Council asks supervisors to ‘send a clear signal to the industry that money laundering / terrorist financing risks communicated to prudential supervisors by AML/CFT supervisors are also factored into the prudential supervisory process and that prudential supervisors cooperate closely with AML/CFT supervisors for this purpose, while respecting the specific tasks of both supervisors.'

Legal basis

  1. The competence of the EBA to deliver this Opinion is based on Article 29(1)(a) of Regulation (EU) No 1093/2010, as part of the EBA's objective of playing ‘an active role in building a common Union supervisory culture and consistent supervisory practices, as well as in ensuring uniform procedures and consistent approaches throughout the Union'

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +33 1 86 52 7052