EBA Issues Guidance on the Roles of AML/CFT Compliance Officers

The European Banking Authority has published guidelines that state the roles of Anti-money laundering and Counter-terror financing (AML/CFT)officers, and also specify the responsibilities of management bodies of Financial institutions.

The guidelines published by the EBA (European Banking Authority) aim to ensure the common explication and complete implementation of the Anti Money Laundering and Counter-terror financing laws. It ensures that the internal governance arrangements across Europe fall under the AML/CFT regulations with complete compliance with the EU directive on the prevention of the use of financial systems for money laundering and terrorist financing.

The guidelines are a clear explanation of the roles and responsibilities of the AML/CFT compliance officer as well as the management bodies. The specification issues the financial and credit institutions to appoint one specific person from their management team. That selected member will be responsible for the implementation of AML/CFT regulations. The EBA guidelines also described the roles of the compliance officer to be a part of the criteria and should ensure the AML/CFT regulations are being followed at the financial firms. 

The guidelines proposed by the European Banking Authority are supposed to create common grounds for all the competent authorities and financial institutions in AML/CFT governance arrangements. They complement but do not replace the related guidelines proposed by the EBA on the basis of suitability checks and wider governance arrangements. 

Legal Background And Laws

The draft of the guidance by the EBA is in line with the coordination and monitoring of the EU financial sector’s fight against money laundering and terror financing. 

In the drafting procedure of these guidelines, the EBA fulfills the Commission’s request in its SNRA (Supra-National Risk Assessment) of 2019 to create an instruction that “clarifies the role of AML/CFT compliance officers in credit and financial institutions”.

Sound AML/CFT governance arrangements are essential for the fulfillment of the private sector’s watchman role and therefore for preventing and fighting ML/TF.

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