The European Banking Authority has published revised detailed guidance on Anti Money Laundering (AML) and Counter-Terrorism Financing (CTF) risk factors.
The EBA, which is mandated by the European Union to issue guidelines to authorities and financial institutions, has updated its guidelines following legal framework changes and the identification of new risks following a consultation process.
The EBA said the guidelines strengthen “requirements on individual and business-wide risk assessments and customer due diligence (CDD) measures, adding new guidance on the identification of beneficial owners, the use of innovative solutions to identify and verify customers’ identities, and how financial institutions should comply with legal provisions on enhanced customer due diligence related to high-risk third countries.”
The guidelines also include new sections on crowdfunding platforms, corporate finance, account information service providers and payment initiation services providers (PISPs), along with firms providing activities of currency exchanges offices. The EBA also stresses the need for supervisory authorities and financial institutions to enhance their understanding of tax crimes.
An EBA spokesperson said: “The EBA reiterates that there is no requirement for financial institutions to discontinue services to entire categories of customers that they associate with higher ML/TF risk (so-called ‘de-risking’). Instead, financial institutions should balance the need for financial inclusion with the need to mitigate and manage ML/TF risk. The guidelines can help financial institutions to achieve this balance.”
The EBA said the guidelines should help financial institutions to consider factors when assessing risks from business relationships or transactions, along with the provision of information on how to adjust customer due diligence approaches. The EBA also said the guidelines support competent authorities’ supervision efforts.
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