AML - ESA's consultation on anti-money laundering and countering the financing of terrorism

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AML - ESA's consultation on anti-money laundering and countering the financing of terrorism

October 2015

The ESAs launched on 21 October 2015 a public consultation on two anti-money laundering and countering the financing of terrorism (AML/CFT) Guidelines.

Risk-Factors Guidelines

On 26 June 2015, Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Directive (EU) 2015/849) entered into force.

In line with the FATF’s standards, Directive (EU) 2015/849 puts the risk-based approach at the centre of Europe’s anti-money laundering (AML) and counter-terrorist financing (CFT) regime.

Article 17 and 18(4) of Directive (EU) 2015/849 require the European Supervisory Authorities to issue guidelines to support firms with this task and to assist competent authorities when assessing the adequacy of firms’ application of simplified and enhanced customer due diligence measures.

The Risk-Factors Guidelines set out factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with a business relationship or occasional transaction but also how they can adjust the extent of their customer due diligence measures in a way that is commensurate to the money laundering and terrorist financing risk they have identified.

These guidelines are divided into two parts:

  • Title II 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 money laundering and terrorist financing risk associated with individual business relationships or occasional transactions. 
  • Title III is sector specific and complements the generic guidance in Title II. It sets out risk factors that are of particular importance in certain sectors and provides guidance on the risk-sensitive application of Customer Due Diligence measures by firms in those sectors.

These guidelines will help firms identify, assess and manage the money-laundering and terrorist financing risk associated with individual business relationships and occasional transactions in a risk-based, proportionate and effective way.

These guidelines are likely to be finalised in Spring 2016.

Risk-Based Supervision Guidelines

The Risk-Based Supervision Guidelines are addressed to competent authorities and give recommendations on:

  • Identification of Money Laundering / Terrorism Financing (“ML/TF”) risk factors, including ML/TF threats and vulnerabilities;
  • Risk assessment;
  • Acting on the ML/TF risk assessment;
  • Monitoring and follow-up action.

These guidelines aim to provide a common European basis for compliance with the FATF's recommendations on risk based AML/CFT supervision.

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