EBA欧洲银行-Opinion-on-Communication-of-ML-TF-risks-to-supervised-entities_4页_217kb

EBA Opinion on ML/TF Risks in Prudential Supervision

Core Content

The European Banking Authority (EBA) issued Opinion EBA-Op-2019-08 on 24 July 2019, emphasizing the integration of money laundering and terrorist financing (ML/TF) risks into the prudential supervision of financial institutions. The opinion aims to align prudential supervisors with AML/CFT authorities to ensure a coordinated and effective supervisory approach across the European Union.

Legal Basis

• The EBA's competence to issue this opinion is based on Article 29(1)(a) of Regulation (EU) No 1093/2010.
• It addresses prudential supervisors as defined in Article 4(2)(i) of the same regulation.
• The opinion was adopted in accordance with Article 14(5) of the Rules of Procedure of the Board of Supervisors.

Background

• The EU has taken steps to strengthen the link between AML/CFT and prudential supervision, including amendments to the Capital Requirements Directive (CRD V).
• The Council of the European Union adopted an Anti-Money Laundering Action Plan in December 2018, which underscores the importance of improving the effectiveness of AML/CFT supervision and promoting information exchange and collaboration between AML/CFT authorities and prudential supervisors.
• The Action Plan calls for prudential supervisors to communicate ML/TF risks to the industry and to cooperate closely with AML/CFT supervisors, while respecting their distinct roles.

ML/TF Risks and Prudential Supervision

• The EBA encourages prudential supervisors to communicate to institutions the expectation that they are aware of and act upon ML/TF risks that could affect the safety and soundness of the institution.
• ML/TF concerns, especially those raised by AML/CFT authorities, should be considered in prudential supervision in the following contexts:
  • Authorisation: Assessing the business model, risk management systems, and suitability of shareholders and management.
  • Ongoing Supervision: Evaluating acquisitions of qualifying holdings and the fit and proper status of the management body.
  • Supervisory Review and Evaluation Process (SREP): Reviewing risks, business models, credit operations, governance, and internal risk management.
  • Administrative Measures: Taking into account AML/CFT-related weaknesses when imposing penalties or considering withdrawal of authorisation.

Information Exchange and Cooperation

• Prudential supervisors are urged to enhance cooperation and information exchange with AML/CFT competent authorities both nationally and internationally.
• This is essential because prudential supervisors use AML/CFT information in their processes, and AML/CFT supervisors rely on prudential data to inform their supervision.
• The EBA highlights the importance of the European Supervisory Authorities' joint Guidelines on cooperation and information exchange, which will further strengthen supervisory relations.

Understanding ML/TF Risks

• Prudential supervisors are encouraged to raise awareness among institutions about the potential impact of ML/TF risks on prudential objectives.
• They should exchange information with AML/CFT authorities on ML/TF risks, including those identified at:
  • The European Commission's supranational risk assessment.
  • The ESA's Joint Opinion on ML/TF risks.
  • National ML/TF risk assessments.

Institutional Responsibility

• It is the responsibility of financial institutions to ensure that their management bodies and senior management are of sufficiently good repute and have the necessary knowledge, skills, and experience.
• Institutions must also ensure that their governance and risk management systems are adequate to identify, assess, and manage ML/TF risks.

Conclusion

This opinion aims to send a unified message to supervised entities about the importance of ML/TF risks in prudential supervision. It promotes cooperation, information sharing, and alignment between prudential and AML/CFT supervisors to enhance the overall effectiveness of supervision in the EU. The EBA will publish this opinion on its website to ensure transparency and facilitate its implementation across the Union.