European Ombudsman
4MLD - European Ombudsman publishes report on accessing basic banking services - 27 July 2020
The European Ombudsman has published a Decision concerning an individual’s right to access basic banking services, such as a basic bank account and payment facilities, where that individual is unable to comply with the provisions of the Fourth Money Laundering Directive (EU) 2015/849 (4MLD).
According to recital 47 of the Payment Accounts Directive (2014/92/EU) (PAD), credit institutions should only refuse to open, or should terminate a contract for a payment account with basic features, in specific circumstances, such as non-compliance with legislation on money laundering and terrorist financing. In addition, Article 1(7) of the PAD states that the opening and use of a payment account with basic features must comply with 4MLD. Under the provisions of 4MLD, and in particular Article 14(4), EU member states must require that where an obliged entity is unable to comply with specified customer due diligence requirements, it must not carry out a transaction through a bank account, establish a business relationship or carry out the transaction, and must terminate the business relationship.
The European Ombudsman sought clarification from the European Commission on:
- how recital 47 and Article 1(7) of the PAD should be interpreted, in conjunction with Article 14(4) of 4MLD;
- whether banks are obliged to refuse to open accounts with basic features on the basis of non-compliance with 4MLD; and
- possible alternative mechanisms that would allow consumers, who cannot open a bank account with basic features due to non-compliance with 4MLD, to undertake essential payment transactions.
The European Commission held that there is no contradiction between recital 47 and Article 1(7) of the PAD, as they both clearly provide that nothing in the PAD can allow an infringement of the provisions of 4MLD. The Commission also notes that recital 47 only clarifies the limited scope, under the 4MLD, to refuse to open a bank account, including one with basic features.
The Commission also stated that it was not aware of any EU legal mechanism to allow consumers, who cannot open a bank account with basic features due to non-compliance with 4MLD, to undertake essential payment transactions. The Commission has undertaken to consider whether any measures are necessary in the framework of the ongoing reviews of both 4MLD and the PAD.
European Ombudsman Decision concerning an individual’s right to access basic banking services where they are unable to comply with 4MLD
Joint Money Laundering Steering Group
AML and CTF - JMLSG publishes sectoral guidance on pooled client accounts, cryptoasset exchanges and custodian wallet providers - July 2020
The Joint Money Laundering Steering Group (JMLSG) has published updated versions of Parts I and II of its guidance on the prevention of money laundering and the financing of terrorism in the UK financial services industry to include new sectoral guidance on pooled client accounts, cryptoasset exchanges and custodian wallet providers. The JMLSG consulted on the proposed revisions to its guidance in March and May 2020.
The new sectoral guidance on pooled client accounts is contained within Annex 5 of Part I of its guidance. The new sectoral guidance on cryptoasset exchanges and custodian wallet providers is contained within Chapter 22 of Part II of its guidance.
The JMLSG states that it has submitted the revised guidance to HM Treasury for approval.
Press release: JMLSG publishes new sectoral guidance on pooled client accounts, cryptoasset exchanges and custodian wallet providers
Part I JMLSG guidance on the prevention of money laundering and the financing of terrorism in the UK financial services industry
Part II JMLSG guidance on the prevention of money laundering and the financing of terrorism in the UK financial services industry
