Response to consultation on draft RTS on the implementation of group wide AML-CFT policies in third countries

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Question 1: Do you agree with the scope of the draft RTS as described in Article 1?

Given the definition of credit institution/financial institution, it appears that the RTS would only apply to subsidiaries of EU credit/financial institutions. The RTS does not seem to cover the situation where a non-EEA (financial) institution has an EEA subsidiary (credit institution / financial undertaking). If this position is correct this would mean that where an EEA financial undertaking is a subsidiary of a non-EEA company, the RTS will not cover such position. My point being that the RTS seems still leaves the situation open where a non EEA conglomerate enters the EEA market by establishing a credit/financial institution, the EEA credit/financial institution obviously would have to adhere to EEA AML requirements, but the non EEA parent (assuming it is not established in one of the FATF countries or countries adhering to its rules) could ignore such rules. If this is considered problematic, the only way of dealing with this seems to be via the EEA subsidiary, for example upon receiving authorization/license to operate, the authorization/license is 'subject to' parent / group undertaking in full adhering to AML rules based on (at the minimum) FAFT standards.

Question 2: Do you agree that while minimum action must always be taken, credit and financial institutions can adjust the nature and extent of the remaining additional measures on a risk-sensitive basis?

I am aware of situations where a large financial institution has to deal with various AML regulations which are contradicting each other, making it hard if not impossible, to put up group wide standards that can be applied generally throughout the group. In such case risk approach seems a good suggestion.

Question 3: Do you agree that the minimum action in Article 3 is appropriate? If you do not agree, please explain and provide evidence where possible. Are there any other minimum actions you think Article 3 should include? If so, please explain and provide evidence where possible.

NA

Question 4: Do you agree that the minimum action and additional measures in Article 4 are appropriate? If you do not agree, please explain and provide evidence where possible. Are there any other minimum actions or additional measures you think Article 4 should include? If so, please explain and provide evidence where possible.

See my comment on Question 1. The measures that potentially can be taken against a branch or subsidiary cannot (obviously) be evoked against a parent company of an EEA holding/parent company. Hence the RTS has limitations in its coverage.

Question 5: Do you agree: that the minimum action and additional measures in Article 5 are appropriate? If you do not agree, please explain and provide evidence where possible. Are there any other minimum actions or additional measures you think Article 5 should include? If so, please explain and provide evidence where possible.

NA

Question 6: Do you agree that the minimum action and additional measures in Article 6 are appropriate? If you do not agree, please explain and provide evidence where possible. Are there any other minimum actions or additional measures you think Article 6 should include? If so, please explain and provide evidence where possible.

NA

Question 7: Do you agree that the minimum action in Article 7 is appropriate? If you do not agree, please explain and provide evidence where possible. Are there any other minimum actions or additional measures you think Article 7 should include? If so, please explain and provide evidence where possible.

NA

Question 8: Are there any other scenarios these RTS should address? In particular, are there any policies and procedures in Article 8 of Directive (EU) 2015/849 where the implementation of a third country’s law might prevent the application of group-wide policies and procedures? Please explain and provide examples where possible.

I am aware of situations where a large financial institution has to deal with various AML regulations which are contradicting each other, making it hard if not impossible, to put up group wide standards that can be applied generally throughout the group.

Question 9: Do you agree with the impact assessment? In particular, • do you agree that there are relatively few countries where the implementation of the law prevents the application of group-wide policies and procedures? Please provide the names of third countries, if any, and the nature of the impediment you have identified. • do you agree that Option 3, whereby the draft RTS distinguish between different situations where a third country’s law prevents the application of group-wide AML/CFT policies and procedures , is the most proportionate option? If you do not agree, please explain and provide evidence where possible. Please also explain which approach you would prefer, and why.

NA

Name of organisation

Keijser Van der Velden