EBA欧洲银行-Joint-Opinion-on-the-risks-on-ML-and-TF-affecting-the-EU27s-financial-sector_84页_6mb

Joint Opinion of the European Supervisory Authorities on ML/TF Risks (2019)

Core Content Overview

This document, issued by the Joint Committee of the European Supervisory Authorities (ESAs), outlines the current and emerging money laundering and terrorist financing (ML/TF) risks affecting the EU's financial sector. It is based on information from competent authorities (CAs) and thematic workshops conducted by the ESAs. The document is divided into cross-sectoral and sector-specific ML/TF risks and provides recommendations for CAs to address these challenges.

Main Points and Key Risks

1. Cross-Sectoral ML/TF Risks

• UK Withdrawal from the EU:
  The UK's exit from the EU (Brexit) is a major source of uncertainty, particularly regarding the supervision of firms relocating from the UK to EU Member States. CAs are concerned about the potential strain on resources and the risk of firms establishing as "shell" companies in the EU.

• New Technologies and Virtual Currencies:
  FinTech and RegTech innovations are seen as both opportunities and risks. The rapid spread of virtual currencies (VCs) has raised concerns, especially due to the lack of regulation and the potential for misuse in ML/TF activities.

• Legislative Divergence:
  Differences in national legal frameworks and supervisory practices across the EU contribute to a lack of convergence in AML/CFT measures. This includes variations in authorisation, ownership structures, and the assessment of key function holders.

• Internal Controls and De-Risking:
  Weaknesses in internal controls, particularly in customer due diligence (CDD), are a widespread concern. These weaknesses can lead to de-risking, where firms terminate relationships with customers, pushing them toward unregulated channels.

• Terrorist Financing:
  Persistent weaknesses in transaction monitoring and limited information sharing between law enforcement, firms, and CAs continue to pose a risk for terrorist financing.

2. Sector-Specific ML/TF Risks

The ESAs have grouped the sectors into five subheadings:

• Inherent Risk in the Sector:
  Credit institutions, payment institutions, bureaux de change, e-money institutions, and investment firms are identified as the most vulnerable to ML/TF risks.

• Quality of Controls and Common Breaches:
  CAs are particularly concerned about the quality of controls in customer identification, risk assessment, and ongoing transaction monitoring. Inadequate CDD measures and lack of oversight are common issues.

• Overall Risk Profile:
  The overall risk profile of most sectors aligns with the inherent risk ratings, indicating that the current controls may not be robust enough to mitigate ML/TF risks effectively.

• Emerging Risks:
  New technologies and virtual currencies are highlighted as significant emerging risks, especially in terms of their potential to increase ML/TF vulnerabilities.

• Recommendations for CAs:
  CAs are advised to improve their understanding of the risks in each sector, enhance their supervisory approach, and ensure that controls are effective. This includes reviewing their supervisory frameworks and engaging with the private sector.

Key Recommendations for Competent Authorities (CAs)

1. Adapt to UK Withdrawal:
   Ensure sufficient resources and staff are available to supervise firms relocating from the UK. Develop cooperation arrangements with UK authorities to maintain information exchange.

2. Address FinTech and RegTech Risks:
   Improve understanding of these technologies and their implications for AML/CFT. Establish consistent standards and ensure that firms are aware of their obligations.

3. Monitor Virtual Currencies:
   Track developments in the VC space and assess whether changes to the national legal and regulatory AML/CFT frameworks are needed. Ensure that custodian wallet providers and exchange services are properly regulated.

4. Strengthen Internal Controls:
   Set clear expectations for firms regarding internal controls, especially in CDD, risk assessment, and transaction monitoring.

5. Enhance Cooperation and Information Sharing:
   Support the exchange of information between law enforcement, firms, and CAs to improve detection and prevention of ML/TF activities.

6. Guard Against De-Risking:
   Prevent firms from terminating relationships with customers due to ML/TF concerns, which can push customers toward unregulated channels.

Methodology and Context

• The ESAs collected information from 58 CAs across the EU and EEA through questionnaires and thematic workshops.
• The methodology has evolved since the 2017 Joint Opinion, leading to more detailed data collection but also making direct comparisons difficult.
• An interactive tool has been developed to provide a quick overview of ML/TF risks and is available on the EBA website: http://tools.eba.europa.eu/joint-opinion/JO_ML_TF_2019.html.

Legal Basis

• The Joint Opinion is required under Article 6(5) of Directive (EU) 2015/849 (AMLD4), which mandates the ESAs to issue a report every two years.
• AMLD4 aims to align EU legislation with the FATF's international standards, emphasizing a risk-based approach.
• AMLD5, published in 2018, further amended AMLD4 and expanded the scope of obliged entities to include custodian wallet providers and exchange services between virtual and fiat currencies.

Conclusion

The ESAs stress the importance of consistent supervision, improved understanding of emerging risks, and enhanced cooperation between CAs, firms, and law enforcement. They highlight the need for Member States to ensure that AML/CFT controls are robust and that the financial sector is resilient against the evolving ML/TF threats.