Here is the converted article in markdown format:

EU Financial Regulators Seek Guidance on Assessing Individual Risk in Anti-Money Laundering Efforts

The European Banking Authority (EBA) has been tasked with providing technical advice to EU financial regulators on developing guidelines for assessing individual risk in anti-money laundering (AML) efforts. The guidance is intended to help financial institutions and other obliged entities identify and mitigate their unique risks associated with money laundering and terrorist financing.

Assessing Individual Risk

According to Article 31(2) of the AMLD6, the EBA must develop draft regulatory technical standards by two years after the entry into force of the AMLD6. The guidance will set out benchmarks and a methodology for assessing and classifying the inherent and residual risk profile of obliged entities. The frequency of reviewing an entity’s risk profile will depend on factors such as:

• Major events or developments in its management and operations
• Nature and size of its business

EBA Guidance

The EBA’s advice is expected to focus on the financial sector, including cryptocurrency service providers, and provide guidance on:

• Assessing inherent risk
• Assessing residual risk
• Developing consolidated risk assessments for groups of obliged entities

The agency will also consider horizontal input from non-financial sectors where applicable.

Customer Due Diligence

Separately, the EBA has been tasked with providing technical advice to develop regulatory technical standards on customer due diligence requirements under Article 22(1) of the AMLR. The guidance is expected to specify requirements for obliged entities to collect information for performing standard, simplified, and enhanced customer due diligence, including minimum requirements in situations of lower risk.

Criteria for Setting Pecuniary Sanctions and Administrative Measures

In addition, the EBA has been tasked with providing technical advice to develop regulatory technical standards on criteria for setting the level of pecuniary sanctions or taking administrative measures under Article 39(7) of the AMLD6. The guidance is expected to define indicators for classifying the level of gravity of breaches and criteria for setting the level of pecuniary sanctions or taking administrative measures.

Overall Guidance

The EBA’s guidance is intended to help EU financial regulators develop a more effective and targeted approach to AML efforts by providing clarity on individual risk assessment and mitigation strategies for obliged entities.