Article 6(5) of Directive (EU) 2015/8491 requires the EBA to issue an Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the European Union’s financial sector every two years. This document is the is the third Opinion on these risks issued so far. The European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA) were closely involved in the process.
In addition to these, sector specific analysis is provided.
2. Guidelines on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions.
The ML/TF Risk Factors Guidelines are issued as per Articles 17 and 18(4) of Directive (EU) 2015/849.
The guidelines were created to support firms’ AML/CFT compliance efforts and enhance the ability of the EU’s financial sector effectively to deter and detect ML/TF. The most recent version (dated 1st March 2021) has been updated as regards:
- business-wide and individual ML/TF risk assessments;
- customer due diligence measures including on the beneficial owner;
- terrorist financing risk factors; and
- new guidance on emerging risks, such as the use of innovative solutions for CDD purposes.
As with previous versions the Guidelines are divided into two parts:
Title I is generic and applies to all firms.
“It is designed to equip firms with the tools they need to make informed, risk-based decisions when identifying, assessing and managing ML/TF risk associated with individual business relationships or occasional transactions.”
Title II is sector-specific and complements the generic guidelines in Title I.
“It sets out risk factors that are of particular importance in certain of those sectors and provides guidance on the risk-sensitive application of Customer Due Diligence measures by firms in those sectors.”
The anti-money laundering and counter terrorist financing area is one that is ever evolving. The pace of change must keep up with the new and varied methods that criminals devise to infiltrate the financial services system. These EBA publications give information and insight that will be of use to designated persons/relevant regulated financial services providers.
EBA Document: Final Report