The European Banking Authority draws attention to the key risks of money laundering and terrorist financing across the EU
The European Banking Authority (EBA) has published an opinion1 on the risks of money laundering and terrorist financing (ML/TF) and its impact on the financial sector of the European Union. The EBA’s opinion focuses primarily on the use of innovative financial services. In addition, the EBA draws attention to the risk of ML/FT in a broader context, such as the COVID-19 pandemic. The opinion also makes recommendations to the EU member state authorities responsible for anti-money laundering (AML).
Some of the risks identified in the opinion, such as the risks associated with virtual currencies and innovative financial services, have already been described in the two previous opinions. For the first time, the EBA has highlighted i.a. a participation of financial institutions in the recognition of tax crimes. The EBA also highlighted the trend towards reducing the perception of risk, which is important for anti-money laundering. The document prepared by the EBA is addressed to financial, supervisory institutions and contains sectoral guidelines addressed to i.a. crowdfunding platforms or bureaus de change.
The EBA once again highlighted the ML/FT risks associated with the COVID19 pandemic arising primarily from the impact of the pandemic on the institution's ability to ensure an adequate level of compliance with AML rules. According to the EBA’s opinion, the risk of AML should be monitored on an ongoing basis in this context and action should be taken without delay. In Poland, the General Inspector for Financial Information (GIIF) also draws attention to the possibility of using the pandemic for money laundering or terrorist financing. Both the EBA and GIIF point i.a. to the use of online schemes as methods of masking funds, the increase in cash flows, the use of corporate structures to fraudulently raise aid or hide funds by identifying insolvency and transferring business to high-liquidity businesses2.
Of particular importance is the question of identifying the actual owner of the corporate customer. In addition to the identification of such person/persons, the EBA indicates the need to determine whether the ownership structure of the customer is not excessively complex or unclear, and to assess whether the person not mentioned as the owner does not exercise effective control over the customer. Verification should not be based solely on the national register of ultimate beneficial owners , both EBA and GIIF indicate additional sources of information such as other public registers, statutes, annual reports and financial statements should be used. The challenge is also situations where the company has a complex ownership structure containing foreign entities.
A similar approach has been adopted by the Polish legislator, pointing in the Anti-Money Laundering and Terrorist Financing Act4 to the unusual or excessively complex ownership structure of the customer as a factor that could increase ML/FT risk. The amendment to the AML Act5 also specifies that it is not possible to rely only on the information contained in the Central Register of Ultimate Beneficial Owners to identify and verify the identity of the ultimate beneficial owner6.
Such a detailed analysis of the ownership structure may not be possible without knowledge and access to specific databases and without practical knowledge in the field of business intelligence7.
In addition, we encourage you to use the interactive tool8 prepared by the EBA. The tool supports the identification of ML risks for the different types of institutions identified in the opinion and takes into account the different risk factors. When analysing the risk factors associated with the current climate, the following references can be consulted: The statement by the President of the FATF9, the FATF Report on COVID-19 associated ML/TF risk10, the European Central Bank's communications11 and the FinCEN’s reports on sectoral risks12.
For more information regarding Deloitte services in the area of AML compliance, please visit our website13.
 GOV.PL - komunikat 23
 Identyfikacja beneficjenta rzeczywistego
 Dz.U. 2018 poz. 723
 Usługi wywiadu gospodarczego
 Tools EBA
 Documents - Financial Action Task Force (FATF) (fatf-gafi.org)
 COVID-19-RELATED ML/TF RISKS AND POTENTIAL POLICY RESPONSES (fatf-gafi.org)
 FAQs on ECB supervisory measures in reaction to the coronavirus (europa.eu)
 Coronavirus | FinCEN.gov
 AML – Przeciwdziałanie praniu pieniędzy i finansowaniu terroryzmu
 EBA Europa