ESAs publish AML/CFT guidelines

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) published today its final Guidelines on anti-money laundering and countering the financing of terrorism (AML/CFT). The Guidelines promote a common understanding of the risk-based approach to AML/CFT and set out how it should be applied.  . These Guidelines are part of the ESAs' wider work on fostering a consistent and effective approach to AML/CFT by both, credit and financial institutions, and AML/CFT supervisors. The Guidelines provide credit and financial institutions with the tools they need to make informed, risk-based decisions on the effective management of individual business relationships and occasional transactions for AML/CFT purposes.

 

They provide guidance on the factors credit and financial institutions should consider when assessing the ML/TF risk associated with a business relationship or occasional transaction. In addition, they set out how credit and financial institutions can adjust the extent of their customer due diligence measures to mitigate  the ML/TF risk they have identified. 

 

Competent authorities will use these Guidelines when assessing whether the ML/TF risk assessment and management systems and controls of EU credit and financial institutions are adequate. The Guidelines These Guidelines are essential to the European Union's fight against ML/TF. They set clear, regulatory expectations of the way credit and financial institutions should discharge important AML/CFT obligations and pave the way for a more effective and proportionate European AML/CFT regime that is consistent with international best practice and guidance. Consequently, the ESAs will keep these guidelines under review and update them as appropriate. A  first update is foreseen once amendments to Directive (EU) 2015/849 have been agreed. 

 

1. The Joint Committee is a forum for cooperation that was established on 1st January 2011, with the goal of strengthening cooperation between the European Banking Authority (EBA), European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA), collectively known as the three European Supervisory Authorities (ESAs).

 

2. Through the Joint Committee, the three ESAs cooperate regularly and closely and ensure consistency in their practices. In particular, the Joint Committee works in the areas of supervision of financial conglomerates, accounting and auditing, micro-prudential analyses of cross-sectoral developments, risks and vulnerabilities for financial stability, retail investment products and measures combating money laundering. In addition to being a forum for cooperation, the Joint Committee also plays an important role in the exchange of information with the European Systemic Risk Board (ESRB).

 

3. These guidelines are based on mandates in Articles 17 and 18(4)  of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

 

4. Directive (EU) 2015/849 puts the risk-based approach at the centre of the EU's AML/CFT regime. It recognises that the risk of money laundering and terrorist financing may vary and that Member States, competent authorities and credit and financial institutions should identify and assess risks in order to decide how to best manage it.