EU to Disclose the Names of the Non-Compliant Banks

  • Richard Marley
  • May 10, 2021
  • 3 minutes read
  • 146

EBA, The European Banking Authority is setting up a database to highlight the names of banks and financial institutions in the EU with inadequate measures to control financial crimes. 

The European Banking Authority responsible for implementing banking regulations in the EU,has declared that the new database would play an important role in coordinating the fight against money laundering and terrorism financing. The authority is planning on gathering the required information from the banks and storing the information in the database to evaluate weaknesses in their AML/CFT controls. The database will gather the information that the national regulatory bodies are taking to investigate the banks and financial institutions having insufficient AML measures.  

The EBA has now turned to stakeholders to gather input about how to highlight those weaknesses and how the data in the database regarding the financial institutions and banks will be distributed to the public as well as the concerned officials. 

The main purpose of this is to lend a hand to regulators in providing them with enough resources across borders for on-site and off-site monitoring and inspection. 

The Bank of Ireland, Ulster Bank, and AIB were penalised with a fine of around €9 million in total a few years back for non-compliance with anti-money laundering regulations. The violations included a lack of proper systems and controls to avoid the exploitation of the financial system by the terrorists as well as other criminals. 

The government of Ireland has been highlighted many times for lagging behind the other EU Member States in adopting AML regulations by the EU. 

EU passed the fifth AMLD in 2018 and all the member states were given the deadline of 2020 to implement the measures. However, the EU introduced the amendments of the existing laws in the latter part of 2020 and in the March of this year, the amendment bill was passed. 

The Central Bank stated in December that the financial institutions are purposely neglecting their regulatory responsibilities regarding the prevention of money laundering and terrorist funding. It has also been highlighted that these financial institutions have left the responsibility of the monitoring to the unqualified and ill prepared staffl. A review of the compliance with AML regulations discovered that the financial industry including banks and brokers were ignoring the regulations. The financial watchdogs sent warning letters to all the firms in the industry the authorities will follow the non-compliant firms to review the strength of their AML/CFT systems.