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PLENITUDE INSIGHTS: EBA Opinion on ML/TF Risk for Banking Institutions

29 April 2021
cover page of article on EBA opinion in ML/TF

PLENITUDE INSIGHTS: EBA Opinion on ML/TF Risk for Banking Institutions

Our second thought leadership paper in this series summarises the main findings and the proposed actions related to Credit Institutions (CI) and provides key considerations and practical steps CIs should take to proactively address the EBA’s findings.

In line with the Fourth EU AML Directive, the European Banking Authority (EBA) issued its 3rd Joint Opinion on the risks of ML/TF affecting the European Union’s financial sector earlier this year.

Article 6(5) of the EU’s Fourth Money Laundering Directive (2015/849) (4MLD) requires the European Supervisory Authorities (ESAs) to issue their joint opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the European Union’s (EU’s) financial sector every two years. On 3 March 2021, the European Banking Authority (EBA) issued the 3rd Joint Opinion. The EBA issued the joint opinion as part of its new mandate to lead, coordinate and monitor the fight against ML/TF in the financial system at the EU level. 

The European Securities and Markets Authority (ESMA) and European Insurance and Occupational Pensions Authority (EIOPA) were closely involved in the process. The survey was informed by over 50 Competent Authorities (CAs) responsible for the AML/CFT supervision of credit and financial institutions. The joint opinion sets out proposed actions addressed to CA’s, which are based on the detailed analysis and findings set out in the report.
Conclusion

Our view is that the joint opinion clearly signals that CA’s should apply a greater focus on the quality of controls in Credit Institutions as part of their supervisory approach, including the review of AML/CFT returns and inspections. Separately the breach findings provide thematic considerations with respect to internal controls, AML/CFT policies and procedures, customer and business-wide risk assessments. 

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