Financial Crime

FR1201 / 5 April 2023

Overview

  • MLD4 - EBA publishes final reports on Guidelines in relation to money laundering and terrorist financing risks

European Banking Authority 

MLD4 - EBA publishes final reports on Guidelines covering money laundering and terrorist financing risks - 31 March 2023

The European Banking Authority (EBA) has published two final reports on Guidelines for money laundering and terrorist financing risks under Articles 17 and 18(4) of the Fourth Money Laundering Directive (EU) 2015/849 (MLD4). The aim of these reports is to address unwarranted derisking and clarify regulatory expectations. These final reports were produced in response to a request from the European Commission following the EBA's January 2022 opinion, and incorporate feedback received during the EBA's December 2022 consultation exercise.

The first set of Guidelines amend Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risks associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of MLD4. The Guidelines cover the risks associated with non-profit organisations (NPOs) and elaborate on factors that firms should consider when evaluating money laundering and terrorist financing risks linked to NPOs. The Guidelines are designed to assist firms in better understanding NPO operations and relevant risk factors when dealing with these customers.

The second set of Guidelines covers policies and controls for the effective management of money laundering and terrorist financing risks when providing access to financial services. They clarify the relationship between access to financial services and firms' anti-money laundering and counter-terrorist financing (CFT) obligations. The Guidelines also detail the steps firms should take when deciding whether to refuse or terminate a business relationship with a customer based on a money laundering or terrorist financing risk or compliance grounds.

Both sets of Guidelines will be translated into all official EU languages and published on the EBA website. National competent authorities will have two months in which to report their compliance with the Guidelines, which will become applicable three months after the publication of the translations.

EBA Final Report: Guidelines amendment Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions should consider when assessing the M and TF risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of Directive (EU) 2015/849

EBA Final Report: Guidelines on policies and controls for the effective management of ML/TF risks when providing access to financial services

Press release