Guidelines on ML/TF risk factors (revised)

These revised guidelines on ML/TF risk factors take into account changes to the EU Anti Money Laundering and Counter Terrorism Financing (AML/CFT) legal ... Skiptomaincontent Home» Regulationandpolicy» RevisedGuidelinesOnMlTfRiskFactors Followuson: GuidelinesonML/TFriskfactors(revised) FinalandtranslatedintotheEUofficiallanguages TheserevisedguidelinesonML/TFriskfactorstakeintoaccountchangestotheEUAntiMoneyLaunderingandCounterTerrorismFinancing(AML/CFT)legalframeworkandnewML/TFrisks,includingthoseidentifiedbytheEBA’simplementationreviewsandintheESAs’2019JointOpiniononML/TFrisks.TheyincludenewguidanceonML/TFriskassessments,customerduediligenceforbeneficialownersandcompliancewiththeprovisionsonenhancedcustomerduediligencerelatedtohigh-riskthirdcountries.Theyalsoincorporatenewsectoralguidanceoncrowdfundingplatforms,corporatefinance,paymentinitiationservicesproviders(PISPs)andaccountinformationserviceproviders(AISPs)andforfirmsprovidingactivitiesofcurrencyexchangeoffices. Documents Guidelinesonmoneylaunderingandterroristfinancingriskfactors Compliancetable  Translationsfor: Guidelines bgбългарски csceština dadansk deDeutsch elΕλληνικά esespañol eteestikeel fisuomi frfrançais hrhrvatski humagyar ititaliano ltlietuviukalba lvlatviešuvaloda mtMalti nlNederlands plPolski ptPortuguês roRomână skSlovencina slSlovenščina svsvenska NewsPressReleaseConsultationPapers News EBAconsultsonrevisedguidelinesonmoneylaunderingandterroristfinancingriskfactors 05February2020TheEBAissuedtodayapublicconsultationonrevisedmoneylaunderingandterroristfinancing(ML/TF)riskfactorsGuidelinesaspartofabroadercommunicationonAML/CFTissues.ThisupdatetakesintoaccountchangestotheEUAntiMoneyLaunderingandCounterTerrorismFinancing(AML/CFT)legalframeworkandnewML/TFrisks,includingthoseidentifiedbytheEBA’simplementationreviews.TheseGuidelinesarecentraltotheEBA’sworktolead,coordinateandmonitorthefightagainstmoneylaunderingandterroristfinancing,explainedintheaccompanyingfactsheet.Theconsultationrunsuntil06July 2020. TheseGuidelines,whichareaddressedtobothfinancialinstitutionsandsupervisors,setoutfactorsthatinstitutionsshouldconsiderwhenassessingtheML/TFriskassociatedwithabusinessrelationshiporoccasionaltransaction.Inaddition,theyprovideguidanceonhowfinancialinstitutionscanadjusttheircustomerduediligencemeasurestomitigatetheML/TFrisktheyhaveidentified. Finally,theysupportcompetentauthorities’AML/CFTsupervisioneffortswhenassessingtheadequacyoffirms’riskassessmentsandAML/CFTpoliciesandprocedures. Initsrevisedversion,theEBAisproposingkeychanges,includingnewguidanceoncompliancewiththeprovisionsonenhancedcustomerduediligencerelatedtohigh-riskthirdcountries.Newsectoralguidelineshavebeenaddedoncrowdfundingplatforms,corporatefinance,paymentinitiationservicesproviders(PISPs)andaccountinformationserviceproviders(AISPs)andforfirmsprovidingactivitiesofcurrencyexchangesoffices. TherevisedGuidelinesalsoprovidemoredetailson terroristfinancingriskfactorsandcustomerduediligence(CDD)measuresincludingontheidentificationofthebeneficialowner,theuseofinnovativesolutionstoidentifyandverifythecustomers’identity.Inaddition,theysetclearregulatoryexpectationsoffirms’business-wideandindividualML/TFriskassessments. TheproposedchangeswillsignificantlystrengthenEurope’sAML/CFTdefencesandfostergreaterconvergenceofsupervisorypracticesinareaswheresupervisoryeffectivenesshasbeenhampered,sofar,bydivergentapproachesintheimplementationofthesameEuropeanlegalrequirements. Consultationprocess CommentstothedraftGuidelinescanbesentbyclickingonthe"sendyourcomments"buttonontheEBA'sconsultationpage.PleasenotethatthatduetothecurrentCovid-19situationthedeadlineforthesubmissionofcommentshasbeenextendedto6July2020. Allcontributionsreceivedwillbepublishedfollowingthecloseoftheconsultation,unlessrequestedotherwise. TheEBAwillholdapublichearingonthedraftGuidelines,whichwilltakeplaceviaconferencecallon15May2020from14:00to16:00Paristime.Thedialindetailswillbecommunicatedinduecourse. LegalBasisandbackground Article17and18ofDirective(EU)No2015/849,mandatetheESAstoissueGuidelinesaddressedtobothCompetentAuthoritiesandtocreditandfinancialinstitutionsontheriskfactorstobeconsideredandthemeasurestobetakeninsituationswheresimplifiedcustomerduediligenceandenhancedcustomerduediligenceareappropriate. InJune2017,thethreeESAsissuedGuidelinesoncustomerduediligenceandthefactorscreditandfinancialinstitutionsshouldconsiderwhenassessingthemoneylaunderingandterroristfinancingrisksassociatedwithindividualbusinessrelationshipsandoccasionaltransactions(JC201737).Sincethen,theapplicablelegislativeframeworkintheEUhaschanged.On9July2018,Directive(EU)2018/843(AMLD5)enteredintoforceandisapplicablefrom10January2020.Moreover,newriskshaveemergedandhavebeenidentifiedintheESAs’2019JointOpinion.TheEuropeanCommission’spostmortemreportandtheEBA’simplementationreviewshashighlightedwidespreadchallengesintheoperationalisationandsupervisionoftherisk-basedapproachtoAML/CFT.Therefore,areviewoftheoriginalRiskFactorsGuidelineswaswarranted. ThescopeoftheEBA’sconsultationislimitedtotheamendmentsandadditionstotheoriginalriskfactorsGuidelines,whichwillberepealedandreplacedwiththerevisedGuidelines. TheEBAhasanewlegalmandatetoleadcoordinateandmonitorthefinancialsector’sfightagainstML/TFacrosstheEU.InformationonhowtheEBAwilldischargeitsAML/CFTfunctionsissetoutinafactsheet publishedtoday. Presscontacts FrancaRosaCongiu [email protected]| +33186527052| Follow@EBA_News PressRelease EBApublishesfinalrevisedGuidelinesonmoneylaunderingandterroristfinancingriskfactors 01March2021 TheseGuidelinesarecentraltotheEBA’sworktolead,coordinateandmonitorthefightagainstmoneylaunderingandterroristfinancing(ML/TF). TheamendmentstotherevisedGuidelinesaimatstrengtheningtheEU’sAML/CFTdefencesbyaligningtherequirementswithrecentchangesinthelegalframeworkintheEU,andaddressingnewML/TFrisks. Theyalsosupporteffectiveandconsistentsupervisionbycompetentauthoritiesoffinancialinstitutions’risk-basedapproachestoAML/CFT. TheEBApublishedtodayitsfinalrevisedGuidelinesonML/TFriskfactors.TherevisionstakeintoaccountchangestotheEUAntiMoneyLaunderingandCounterTerrorismFinancing(AML/CFT)legalframeworkandaddressnewML/TFrisks,includingthoseidentifiedbytheEBA’simplementationreviews.Inadditiontostrengtheningfinancialinstitutions’risk-basedapproachestoAML/CFT,therevisionsupportsthedevelopmentofmoreeffectiveandconsistentsupervisoryapproacheswhereevidencesuggestedthatdivergentapproachescontinuetoexist.TheGuidelinesarecentraltotheEBA’sworktolead,coordinateandmonitorthefightagainstmoneylaunderingandterroristfinancing. TheGuidelinesareaddressedtobothfinancialinstitutionsandsupervisoryauthorities.TheysetoutfactorsthatfirmsshouldconsiderwhenassessingtheML/TFriskassociatedwithabusinessrelationshiporoccasionaltransaction.Inaddition,theyprovideguidanceonhowfinancialinstitutionscanadjusttheircustomerduediligencemeasurestomitigatetheML/TFrisktheyhaveidentifiedsoastomakethemmoreappropriateandproportionate. Finally,theysupportcompetentauthorities’AML/CFTsupervisioneffortswhenassessingtheadequacyoffirms’riskassessmentsandAML/CFTpoliciesandprocedures. Inthisrevisedversion,theEBAstrengthenstherequirementsonindividualandbusiness-wideriskassessmentsandcustomerduediligence(CDD)measures,addingnewguidanceontheidentificationofbeneficialowners,theuseofinnovativesolutionstoidentifyandverifycustomers’identities,andhowfinancialinstitutionsshouldcomplywithlegalprovisionsonenhancedcustomerduediligencerelatedtohigh-riskthirdcountries.Inaddition,theEBAincludednewsectoralguidelinesforcrowdfundingplatforms,corporatefinance,accountinformationserviceproviders(AISPs)andpaymentinitiationservicesproviders(PISPs),andfirmsprovidingactivitiesofcurrencyexchangesoffices.TherevisedGuidelinesalsoprovidemoredetailson terroristfinancingriskfactors.Together,thesechangeswillbeconducivetotheimplementationbyfinancialinstitutionsofamoreeffective,risk-basedapproachtoAML/CFT. TheEBAreiteratesthatthereisnorequirementforfinancialinstitutionstodiscontinueservicestoentirecategoriesofcustomersthattheyassociatewithhigherML/TFrisk(so-called‘de-risking’):Instead,financialinstitutionsshouldbalancetheneedforfinancialinclusionwiththeneedtomitigateandmanageML/TFrisk.Theguidelinescanhelpfinancialinstitutionstoachievethisbalance. TheEBAalsostressestheneedforsupervisoryauthoritiesandfinancialinstitutionstoenhancetheirunderstandingoftaxcrimes,assetoutlastyearintheEBA’sReportoncompetentauthorities’approachestotacklingmarketintegrityrisksassociatedwithdividendarbitrageschemes(EBA/REP/2020/15). LegalBasis,backgroundandnextsteps Articles17and18(4)ofDirective(EU)2015/849,mandatetheEBAtoissueGuidelinesaddressedtobothCompetentAuthoritiesandtocreditandfinancialinstitutionsontheriskfactorstobeconsideredandthemeasurestobetakeninsituationswheresimplifiedcustomerduediligenceandenhancedcustomerduediligenceareappropriate. InJune2017,thethreeESAsissuedGuidelinesoncustomerduediligenceandthefactorscreditandfinancialinstitutionsshouldconsiderwhenassessingthemoneylaunderingandterroristfinancingrisksassociatedwithindividualbusinessrelationshipsandoccasionaltransactions(JC201737).Sincethen,theapplicablelegislativeframeworkintheEUhaschanged.On9July2018,Directive(EU)2018/843(AMLD5)enteredintoforceandhasbeenapplicablefrom10January2020.Moreover,newriskshaveemergedandhavebeenidentifiedintheESAs’2019JointOpinion.TheEuropeanCommission’spostmortemreportandtheEBA’simplementationreviewshavehighlightedwidespreadchallengesintheoperationalisationandsupervisionoftherisk-basedapproachtoAML/CFT.Therefore,areviewoftheoriginalRiskFactorsGuidelineswaswarranted. TheoriginalriskfactorsGuidelineswillberepealedandreplacedwiththerevisedGuidelines. TheGuidelineswillbetranslatedintotheofficialEUlanguagesandpublishedontheEBAwebsite.Thedeadlineforcompetentauthoritiestoreportwhethertheycomplywiththeguidelineswillbetwomonthsafterthepublicationofthetranslations.TheguidelineswillapplythreemonthsafterpublicationinallEUofficiallanguages. TheEBA’sroleandmandateonAML/CFTisexplainedinafactsheet.TheEBAregularlyinformsitsstakeholdersonitsworkanddeliverableswithadedicatedAML/CFTnewsletter;alleditionscanbeaccessedviatheEBA’swebsite. Presscontacts FrancaRosaCongiu [email protected]| +33186527052| Follow@EBA_News ConsultationPapers DraftGuidelinesunderArticles17and18(4)ofDirective(EU)2015/849oncustomerduediligenceandML/TFriskfactors(JC201987) Summary 05/02/2020 TheEBAissuedtodayapublicconsultationonrevisedmoneylaunderingandterroristfinancing(ML/TF)riskfactorsGuidelinesaspartofabroadercommunicationonAML/CFTissues.ThisupdatetakesintoaccountchangestotheEUAntiMoneyLaunderingandCounterTerrorismFinancing(AML/CFT)legalframeworkandnewML/TFrisks,includingthoseidentifiedbytheEBA’simplementationreviews.TheseGuidelinesarecentraltotheEBA’sworktolead,coordinateandmonitorthefightagainstmoneylaunderingandterroristfinancing,explainedintheaccompanyingfactsheet.Theconsultationrunsuntil06July 2020.TheseGuidelines,whichareaddressedtobothfinancialinstitutionsandsupervisors,setoutfactorsthatinstitutionsshouldconsiderwhenassessingtheML/TFriskassociatedwithabusinessrelationshiporoccasionaltransaction.Inaddition,theyprovideguidanceonhowfinancialinstitutionscanadjusttheircustomerduediligencemeasurestomitigatetheML/TFrisktheyhaveidentified. Finally,theysupportcompetentauthorities’AML/CFTsupervisioneffortswhenassessingtheadequacyoffirms’riskassessmentsandAML/CFTpoliciesandprocedures.Initsrevisedversion,theEBAisproposingkeychanges,includingnewguidanceoncompliancewiththeprovisionsonenhancedcustomerduediligencerelatedtohigh-riskthirdcountries.Newsectoralguidelineshavebeenaddedoncrowdfundingplatforms,corporatefinance,paymentinitiationservicesproviders(PISPs)andaccountinformationserviceproviders(AISPs)andforfirmsprovidingactivitiesofcurrencyexchangesoffices.TherevisedGuidelinesalsoprovidemoredetailson terroristfinancingriskfactorsandcustomerduediligence(CDD)measuresincludingontheidentificationofthebeneficialowner,theuseofinnovativesolutionstoidentifyandverifythecustomers’identity.Inaddition,theysetclearregulatoryexpectationsoffirms’business-wideandindividualML/TFriskassessments.TheproposedchangeswillsignificantlystrengthenEurope’sAML/CFTdefencesandfostergreaterconvergenceofsupervisorypracticesinareaswheresupervisoryeffectivenesshasbeenhampered,sofar,bydivergentapproachesintheimplementationofthesameEuropeanlegalrequirements.ConsultationprocessCommentstothedraftGuidelinescanbesentbyclickingonthe"sendyourcomments"buttonontheEBA'sconsultationpage.PleasenotethatthatduetothecurrentCovid-19situationthedeadlineforthesubmissionofcommentshasbeenextendedto6July2020.Allcontributionsreceivedwillbepublishedfollowingthecloseoftheconsultation,unlessrequestedotherwise.TheEBAwillholdapublichearingonthedraftGuidelines,whichwilltakeplaceviaconferencecallon15May2020from14:00to16:00Paristime.Thedialindetailswillbecommunicatedinduecourse.LegalBasisandbackgroundArticle17and18ofDirective(EU)No2015/849,mandatetheESAstoissueGuidelinesaddressedtobothCompetentAuthoritiesandtocreditandfinancialinstitutionsontheriskfactorstobeconsideredandthemeasurestobetakeninsituationswheresimplifiedcustomerduediligenceandenhancedcustomerduediligenceareappropriate.InJune2017,thethreeESAsissuedGuidelinesoncustomerduediligenceandthefactorscreditandfinancialinstitutionsshouldconsiderwhenassessingthemoneylaunderingandterroristfinancingrisksassociatedwithindividualbusinessrelationshipsandoccasionaltransactions(JC201737).Sincethen,theapplicablelegislativeframeworkintheEUhaschanged.On9July2018,Directive(EU)2018/843(AMLD5)enteredintoforceandisapplicablefrom10January2020.Moreover,newriskshaveemergedandhavebeenidentifiedintheESAs’2019JointOpinion.TheEuropeanCommission’spostmortemreportandtheEBA’simplementationreviewshashighlightedwidespreadchallengesintheoperationalisationandsupervisionoftherisk-basedapproachtoAML/CFT.Therefore,areviewoftheoriginalRiskFactorsGuidelineswaswarranted.ThescopeoftheEBA’sconsultationislimitedtotheamendmentsandadditionstotheoriginalriskfactorsGuidelines,whichwillberepealedandreplacedwiththerevisedGuidelines.TheEBAhasanewlegalmandatetoleadcoordinateandmonitorthefinancialsector’sfightagainstML/TFacrosstheEU.InformationonhowtheEBAwilldischargeitsAML/CFTfunctionsissetoutinafactsheet publishedtoday. Consultationpaper Responses AFEPAMEALFIAMAFIAssociationforFinancialMarketsinEurope(AFME)AssociationofForeignBanksinGermanyBIPAR(EuropeanFederationofInsuranceandFinancialIntermediaries)BitkomConcordeInvestments(Cyprus)LtdD'ArgenioPolizzieAssociatiStudioLegaleDeNederlandscheBankEBFEFAMA(EuropeanFundandAssetManagementAssociation)EYConsultingNetherlandsLLPEfficientFrontiersInternationalLimitedElectronicMoneyAssociationEuropeanFinTechAssociationa.s.b.l.EuropeanNetworkofCreditUnionsEuropeanPaymentInstitutionsFederation(EPIF)EuropeanThirdPartyProviderAssociation(ETPPA)FinanceDenmarkFinancialDataandTechnologyAssociation(FDATA)EuropeFinancialDataandTechnologyAssociation(FDATA)EuropeGlobalLegalEntityIdentifierFoundation(GLEIF)INGNVInfoCertS.p.A.InstituteofInternationalFinanceInsuranceEuropeInsuranceIrelandNFU-NordicFinancialUnionsNationalBankofRomaniaOpenBankingImplementationEntity(OBIE)PREVENCIÓNDEBLANQUEOCONSULTORES,SociedadLimitadaPayBelgiumPayPalPrepaidVerbandDeutschlande.V.(PrepaidAssociationGermany)TheAssociationFrançaisedelaGestionfinancière(AFG)TheInvestmentAssociationTheWolfsbergGroupThistleInitiativesLimitedUniCreditfinleapconnectGmbHn/a PublicHearing Note:APublicHearingisrelatedtothisconsultationbutisnotvisibletopublicuserssincethedateispast