Another Step Taken by the EU to Harmonize AML Rules

The European Banking Authority’s proposal is the latest push by the EU to harmonize anti-money-laundering rules across member states.

More details here: https://t.co/OTp9vewhVr via @WSJ #EU #AML

— Shahid (@Shahid58732587) August 6, 2021

The European Commission, in July, proposed creating an AML agency that will have direct supervisory authority over financial institutions. The proposal was put forward after the twin scandals involving the ABLV bank and Danske Bank A/S said that it would create an EU-wide AML rulebook. 

A Frankfurt-based defense lawyer, David Pasewaldt said, 

“This is a step toward paving the way for the new EU-wide authority.”

Some member states have AML standards in place, however, this proposal will be helpful for FIs and their compliance officers since the standards are thorough and specific, as per David. He said, 

“The level of detail [the EBA’s guidance] contains is quite surprising.”

Although the entire board will be responsible, the new guidelines require one member of an FI’s management board to be particularly responsible for the company’s AML program. It also highlights the responsibilities of anti-money laundering compliance officers, including the due diligence on customers and reporting of suspicious transactions to the relevant authorities. According to the proposal, compliance officers must report directly to the company’s management board.

Strategic decisions about AML/CTF should not be outsourced to third parties. The guidance emphasizes on banks to designate a team of compliance officers who is responsible for harmonizing the financial infrastructure’s approach to AML rules across the EU member states.