Response to consultation on draft Guidelines under Articles 17 and 18(4) of Directive (EU) 2015/849 on customer due diligence and ML/TF risk factors
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I suggest that EBA should consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. This guideline could be established perhaps by using a benchmark such as Transparency International CPI Index so that FIs providing or offering bond products to countries rated as highly corrupt should require those countries to evidence how they spent appropriated funds or previous loans they had raised in the capital market. This is imperative because highly corrupt countries often divert or misappropriate funds they raised from capital market thereby accumulating unsustainable debts to the detriment of their citizens. Because CPI uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean. I propose that this should apply to countries that has CPI Score of 30/100 or less. With this measure, EBA should require bond underwriter, bookrunner or lead manager underwriting or managing the sovereign bond within the EU, to appoint Independent monitors to monitor, evaluate and report on whether the sovereign or state-owned company has judiciously used the funds for purpose for which it was raised (that is, utilised the funds for the specified project/purpose for which those funds were borrowed). Let me use example here to provide clarity on this. We could probably see how Covid-19 funds and protective equipment are been misappropriated, mismanaged and diverted in highly corrupt countries. This is the way highly corrupt countries misappropriate, embezzle or divert funds the borrowed from the international capital market at the detriment of their citizens, yet the government of these countries keep coming to the capital market to borrow or raise funds again for the same project/purpose. For example, a country in Africa has been raising fund to fund its power, infrastructure and electricity projects, yet there has been no meaningful progress because the monies are probably been diverted, embezzled, mismanaged or misappropriated.
Therefore, EBA should not only consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, embezzlement, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. Even though this is a risk factor. EU Commission, should enact law, to compel e.g. bond underwriters, lead managers, bookrunners underwriting or managing sovereign bond issue or bonds from state-owned entities or perhaps the bond issuers itself to appoint a highly qualified, and a reputable independent monitors or investigators to monitor the utilisation of those funds if the borrower is a sovereign or a state-owned company in a highly corrupt country.
In doing this, I believe that the EBA and EU commission would be helping to promote transparency and accountability, and thereby contributing to the UN Sustainable Development Goals.
I suggest that EBA should consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimize, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. This guideline could be established perhaps by using a benchmark such as Transparency International CPI Index so that FIs providing or offering bond products to countries rated as highly corrupt should require those countries to evidence how they spent appropriated funds or previous loans they had raised in the capital market. This is imperative because highly corrupt countries often divert or misappropriate funds they raised from capital market thereby accumulating unsustainable debts to the detriment of their citizens. Because CPI uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean. I propose that this should apply to countries that has CPI Score of 30/100 or less. With this measure, EBA should require bond underwriter, bookrunner or lead manager underwriting or managing the sovereign bond within the EU, to appoint Independent monitors to monitor, evaluate and report on whether the sovereign or state-owned company has judiciously used the funds for purpose for which it was raised (that is, utilised the funds for the specified project/purpose for which those funds were borrowed). Let me use example here to provide clarity on this. We could probably see how Covid-19 funds and protective equipment are been misappropriated, mismanaged and diverted in highly corrupt countries. This is the way highly corrupt countries misappropriate, embezzle or divert funds the borrowed from the international capital market at the detriment of their citizens, yet the government of these countries keep coming to the capital market to borrow or raise funds again for the same project/purpose. For example, a country in Africa has been raising fund to fund its power, infrastructure and electricity projects, yet there has been no meaningful progress because the monies are probably been diverted, embezzled, mismanaged or misappropriated.
Therefore, EBA should not only consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, embezzlement, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. Even though this is a risk factor. EU Commission, should enact law, to compel e.g. bond underwriters, lead managers, bookrunners underwriting or managing sovereign bond issue or bonds from state-owned entities or perhaps the bond issuers itself to appoint a highly qualified, and a reputable independent monitors or investigators to monitor the utilisation of those funds if the borrower is a sovereign or a state-owned company in a highly corrupt country.
In doing this, I believe that the EBA and EU commission would be helping to promote transparency and accountability, and thereby contributing to the UN Sustainable Development Goals.
Question 1: Do you have any comments with the proposed changes to the Definitions section of the Guidelines?
noQuestion 2: Do you have any comments on the proposed amendments to Guideline 1 on risk assessment?
noQuestion 3: Do you have any comments on the proposed amendments to Guideline 2 on identifying ML/TF risk factors?
noQuestion 4: Do you have any comments on the proposed amendments and additions in Guideline 4 on CCD measures to be applied by all firms?
noQuestion 5: Do you have any comments on the amendments to Guideline 5 on record keeping?
noQuestion 6: Do you have any comments on Guideline 6 on training?
noQuestion 7: Do you have any comments on the amendments to Guideline 7 on reviewing effectiveness?
noQuestion 8: Do you have any comments on the proposed amendments to Guideline 8 for correspondent banks?
Bond Market.I suggest that EBA should consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. This guideline could be established perhaps by using a benchmark such as Transparency International CPI Index so that FIs providing or offering bond products to countries rated as highly corrupt should require those countries to evidence how they spent appropriated funds or previous loans they had raised in the capital market. This is imperative because highly corrupt countries often divert or misappropriate funds they raised from capital market thereby accumulating unsustainable debts to the detriment of their citizens. Because CPI uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean. I propose that this should apply to countries that has CPI Score of 30/100 or less. With this measure, EBA should require bond underwriter, bookrunner or lead manager underwriting or managing the sovereign bond within the EU, to appoint Independent monitors to monitor, evaluate and report on whether the sovereign or state-owned company has judiciously used the funds for purpose for which it was raised (that is, utilised the funds for the specified project/purpose for which those funds were borrowed). Let me use example here to provide clarity on this. We could probably see how Covid-19 funds and protective equipment are been misappropriated, mismanaged and diverted in highly corrupt countries. This is the way highly corrupt countries misappropriate, embezzle or divert funds the borrowed from the international capital market at the detriment of their citizens, yet the government of these countries keep coming to the capital market to borrow or raise funds again for the same project/purpose. For example, a country in Africa has been raising fund to fund its power, infrastructure and electricity projects, yet there has been no meaningful progress because the monies are probably been diverted, embezzled, mismanaged or misappropriated.
Therefore, EBA should not only consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, embezzlement, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. Even though this is a risk factor. EU Commission, should enact law, to compel e.g. bond underwriters, lead managers, bookrunners underwriting or managing sovereign bond issue or bonds from state-owned entities or perhaps the bond issuers itself to appoint a highly qualified, and a reputable independent monitors or investigators to monitor the utilisation of those funds if the borrower is a sovereign or a state-owned company in a highly corrupt country.
In doing this, I believe that the EBA and EU commission would be helping to promote transparency and accountability, and thereby contributing to the UN Sustainable Development Goals.
Question 9: Do you have any comments on the proposed amendments to Guideline 9 for retail banks?
noQuestion 10: Do you have any comments on the proposed amendments to Guideline 10 for electronic money issuers?
noQuestion 11: Do you have any comments on the proposed amendments to Guideline 11 for money remitters?
noQuestion 12: Do you have any comments on the proposed amendments to Guideline 12 for wealth management?
noQuestion 13: Do you have any comments on the proposed amendments to Guideline 13 for trade finance providers?
noQuestion 14: Do you have any comments on the proposed amendments to Guideline 14 for life insurance undertakings?
noQuestion 15: Do you have any comments on the proposed amendments to Guideline 15 for investment firms?
noQuestion 16: Do you have any comments on the proposed amendments to Guideline 16 for providers of investment funds and the definition of customer in this Guideline?
noQuestion 17: Do you have any comments on the additional sector-specific Guideline 17 on crowdfunding platforms?
noQuestion 18: Do you have any comments on the additional sector-specific Guideline 18 on account information and payment initiation service providers?
noQuestion 19: Do you have any comments on the additional sector-specific Guideline 19 on currency exchanges?
noQuestion 20: Do you have any comments on the additional sector-specific Guideline 20 on corporate finance?
Bond Market.I suggest that EBA should consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimize, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. This guideline could be established perhaps by using a benchmark such as Transparency International CPI Index so that FIs providing or offering bond products to countries rated as highly corrupt should require those countries to evidence how they spent appropriated funds or previous loans they had raised in the capital market. This is imperative because highly corrupt countries often divert or misappropriate funds they raised from capital market thereby accumulating unsustainable debts to the detriment of their citizens. Because CPI uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean. I propose that this should apply to countries that has CPI Score of 30/100 or less. With this measure, EBA should require bond underwriter, bookrunner or lead manager underwriting or managing the sovereign bond within the EU, to appoint Independent monitors to monitor, evaluate and report on whether the sovereign or state-owned company has judiciously used the funds for purpose for which it was raised (that is, utilised the funds for the specified project/purpose for which those funds were borrowed). Let me use example here to provide clarity on this. We could probably see how Covid-19 funds and protective equipment are been misappropriated, mismanaged and diverted in highly corrupt countries. This is the way highly corrupt countries misappropriate, embezzle or divert funds the borrowed from the international capital market at the detriment of their citizens, yet the government of these countries keep coming to the capital market to borrow or raise funds again for the same project/purpose. For example, a country in Africa has been raising fund to fund its power, infrastructure and electricity projects, yet there has been no meaningful progress because the monies are probably been diverted, embezzled, mismanaged or misappropriated.
Therefore, EBA should not only consider issuing guidelines on Sovereign Bonds or Sovereign borrowers from highly corrupt countries to minimise, embezzlement, misappropriation, mismanagement and diversion of public funds in developing or highly corrupt countries. Even though this is a risk factor. EU Commission, should enact law, to compel e.g. bond underwriters, lead managers, bookrunners underwriting or managing sovereign bond issue or bonds from state-owned entities or perhaps the bond issuers itself to appoint a highly qualified, and a reputable independent monitors or investigators to monitor the utilisation of those funds if the borrower is a sovereign or a state-owned company in a highly corrupt country.
In doing this, I believe that the EBA and EU commission would be helping to promote transparency and accountability, and thereby contributing to the UN Sustainable Development Goals.