EBA欧洲银行-JC-2013-72-28Report-on-Risk-Based-Supervision29_20页_775kb

Summary of JC-2013-72: Preliminary Report on AML/CFT Risk Based Supervision

Core Content

This document, prepared by the Anti-Money Laundering Sub-Committee (AMLC) of the Joint Committee of the European Supervisory Authorities, provides guidance on the implementation of a Risk Based Supervision (RBS) model for AML/CFT supervision across the European Union (EU). It is designed to assist national supervisory authorities in developing or revising their RBS frameworks to align with the revised Financial Action Task Force (FATF) Standards and the proposed Fourth AML Directive.

The report outlines the steps for implementing an RBS model, including the collection of information, risk identification and assessment, mitigation actions, and monitoring and follow-up. It also includes self-assessment questions for supervisory authorities to evaluate their RBS model.

The FATF Interpretive Note 26 (INR26) is emphasized as a key reference, highlighting that a risk-based approach enables supervisory authorities to allocate resources more effectively and ensures that supervision is proportional to the risk. The report also references the FATF Methodology for assessing technical compliance with its recommendations, which includes evaluating the effectiveness of AML/CFT systems through the lens of "immediate outcome number 3".

Main Views

• Risk Based Supervision (RBS) is a dynamic, continuous process that allows supervisory authorities to focus on areas of higher risk and allocate resources accordingly.
• RBS should not be a tick box exercise, but rather a tailored approach that considers the legal, regulatory, and institutional context of each country and sector.
• The proposed Fourth AML Directive mandates that supervisory authorities apply a risk-sensitive approach, with specific requirements for resource allocation, risk profiling, and periodic review.
• The risk assessment process must consider macro- and micro-level information, including national, sectoral, and institutional risks, as well as likelihood and consequences of ML/TF activities.
• Supervisors should share risk information with financial institutions and other competent authorities to enhance compliance and risk management.
• Effectiveness of AML/CFT systems is evaluated through several core issues, such as preventing criminal ownership, identifying ML/TF risks, ensuring compliance, and demonstrating the impact of supervisory actions.

Key Components of RBS

1. Collection of Information:

   • Macro-level: National and sectoral ML/TF risk assessments.
   • Micro-level: Information on individual financial institutions and groups.
   • Sources include internal and external data, such as FATF publications and FIU (Financial Intelligence Unit) reports.

2. Risk Identification and Assessment:

   • A structured and continuous process to evaluate the likelihood and impact of ML/TF risks.
   • Consideration of international, national, sectoral, and institutional risks.
   • Risk assessments should be reviewed periodically and updated in response to new developments.

3. Acting upon Risk Assessment:

   • Resource allocation based on the risk profile of institutions and the country's ML/TF risk.
   • Development of supervisory plans and tools that reflect the risk assessment.
   • Sharing of risk assessments with financial institutions and other authorities is encouraged within legal limits.

4. Monitoring and Follow-up:

   • Regular assessment of the effectiveness and relevance of the RBS model.
   • Updates to the RBS model in response to sector changes or new risks.
   • Ensuring that the RBS model is conceptually sound and practically effective.

Key Information

• The document is non-binding and serves as a guidance tool rather than a regulatory requirement.
• It does not cover how financial institutions implement their own AML/CFT risk-based approaches, but rather how supervisors should approach their oversight.
• The FATF's Immediate Outcome 3 is a central focus, requiring supervisors to ensure that their supervisory actions are commensurate with the risk.
• Self-assessment questions are provided to help supervisory authorities evaluate their RBS model and identify areas for improvement.
• The risk assessment should be based on threat, vulnerability, and consequence and should be flexible and responsive to changes in the financial landscape.

Annexes Overview

• Annex 1: Provides the FATF Recommendation 26 and its interpretive note, which emphasize the importance of regulation and supervision of financial institutions to prevent ML/TF.
• Annex 2: Outlines the methodology for assessing technical compliance with FATF recommendations, including the effectiveness of AML/CFT systems.
• Annex 3: Includes extracts from the EU Proposal of the Fourth AML Directive, which sets out conditions for RBS and supervisory obligations.

Conclusion

This document aims to support supervisory authorities in aligning their AML/CFT supervision with international and EU standards, ensuring that they are effective, consistent, and risk-sensitive. It encourages a holistic and adaptive approach to risk-based supervision, focusing on information collection, risk analysis, resource allocation, and continuous improvement.