Financial Crime World

European Banking Authority Gains New Powers to Combat Money Laundering and Terrorism Financing

The European Banking Authority (EBA) has been granted new powers by regulatory authorities to strengthen its role in monitoring the implementation of EU Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) standards. The EBA will utilize three key tools to ensure compliance with AML/CFT requirements across the European Union.

Tools for Monitoring AML/CFT Implementation

The EBA’s new powers will be used in conjunction with the following tools:

Thematic Peer Reviews

  • Conducting reviews of National Competent Authorities (NCAs): The EBA will conduct in-depth reviews of NCAs to ensure compliance with specific AML/CFT requirements.
  • Ensuring consistency across EU: By conducting thematic peer reviews, the EBA aims to promote greater consistency and effectiveness in the implementation of AML/CFT rules across the EU.

Information Requests

  • Using database and other sources: The EBA will use its database and other sources to request action from NCAs if they have indications that a financial institution or group of institutions are materially breaching EU law.
  • Prompting corrective actions: Information requests will prompt NCAs to take necessary corrective actions to address potential AML/CFT breaches.

Investigations into Breaches of Union Law

  • Investigating possible breaches: The EBA will investigate possible breaches of Union law by AML/CFT authorities, using the powers granted under Article 17 of the EBA Regulation.
  • Enforcing EU law: By conducting investigations and enforcing EU law, the EBA aims to protect the single market from financial crime.

Addressing Limitations in Current Minimum Harmonization Approach

While the new powers aim to promote greater consistency and effectiveness in AML/CFT implementation, some concerns remain about the current minimum harmonization approach. This approach may not be sufficient to achieve significant and lasting change in AML/CFT implementation, potentially leaving the single market vulnerable to financial crime.

Possible Questions and Considerations

  • Main objectives of EBA’s new powers: What are the primary goals of the EBA’s new powers in relation to AML/CFT?
  • Thematic peer reviews: How will the EBA use thematic peer reviews to monitor compliance with AML/CFT requirements?
  • Breach of Union law investigations vs. information requests: What is the difference between breach of Union law investigations and information requests under Article 9b of the EBA Regulation?
  • Current minimum harmonization approach: Why may the current minimum harmonization approach not be sufficient to achieve significant and lasting change in AML/CFT implementation?