EBA acts to improve AML/CFT supervision in Europe

05 February 2020

•    Results from the first AML implementation review highlight that competent authorities are working hard to reform their approach to AML/CFT supervision. 
•    Challenges remain that need to be addressed to ensure AML/CFT supervision is risk based, proportionate and effective.
•    The EBA is reviewing competent authorities’ approach to AML/CFT supervision as part of its duty to lead, coordinate and monitor European supervisors’ AML/CFT policies and efforts.

The European Banking Authority (EBA) published today its first Report on competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. This publication is part of the EBA’s new role to lead, coordinate and monitor the fight against money laundering and terrorist financing (ML/TF) in all EU Member States, which is further explained in the accompanying factsheet

The EBA’s findings show that most competent authorities in this year’s sample are taking significant steps to strengthen their approach to AML/CFT supervision. AML/CFT supervisory staff have a good understanding of international and European AML/CFT standards and are committed to the fight against financial crime. Several competent authorities have made the fight against ML/TF one of their key priorities, and in a number of cases, significantly expanded their AML/CFT supervisory teams.

Nevertheless, the EBA found that significant challenges remain and are common to all competent authorities in the sample. These include the need to move away from a focus on tick box compliance to assessing the effectiveness of banks’ AML/CFT systems and controls. Competent authorities also need to strengthen their approach to ensuring compliance by taking more proportionate and sufficiently dissuasive measures to correct deficiencies in banks’ AML/CFT systems and controls.  Finally, the EBA found that not all competent authorities were able to cooperate effectively with domestic and international stakeholders to draw on synergies and to position AML/CFT in the wider national and international supervisory framework.

The EBA’s findings and associated recommendations are relevant to all AML/CFT competent authorities regardless of whether they were included in this year’s sample.

Note to editors

  1. The European Union (EU) has a comprehensive legal framework to tackle money laundering and terrorist financing. Nevertheless, there has been a constant stream of high profile ML/TF cases involving European banks. These scandals, together with findings by international AML/CFT assessment bodies, point to deficiencies in some competent authorities’ approaches to their AML/CFT supervision of banks, have led to suggestions that supervisors should do more to ensure that Europe’s AML/CFT framework is implemented consistently and effectively. The EBA, therefore, decided to review the effectiveness of national competent authorities’ approaches to the AML/CFT supervision of banks, and to support individual competent authorities’ AML/CFT efforts.

The EBA has a new legal mandate to lead, coordinate and monitor the financial sector’s fight against ML/TF across the EU. Information on how the EBA will discharge its AML/CFT functions is set out in a factsheet published today.

 

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Franca Rosa Congiu

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