Another Step Taken by the EU to Harmonize AML Rules

  • Richard Marley
  • August 06, 2021
  • 3 minutes read
  • 103

The European Banking Authority has proposed new guidance for compliance officers. The attempt is part of a wider initiative to revamp how the bloc deals with financial crime. 

The European Union’s Banking regulator proposed guidelines for the finance sector’s compliance officers. Another step in the bloc’s efforts to revamp its anti-money laundering system. 

The proposal is the latest attempt by the European Union from the Paris-based European Banking Authority to harmonize AML rules across the member states. This will gradually shift implementation away from national authorities. 

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.