EUROPEAN COMMISSION
AML and CFT action plan – European Commission publishes speech – 17 May 2021
The European Commission (Commission) has published a speech by the European Commissioner for Financial Services, Financial Stability and Capital Markets Union (CMU), Mairead McGuinness, outlining elements of the reforms the Commission intends to present in order to implement its May 2020 anti-money laundering (AML) and counter-terrorist financing (CTF) action plan.
The presentation of a package of legal proposals to deliver the new EU AML and CTF framework was initially planned for Q1 2021. Commissioner McGuinness explained that, owing to technical issues and the volume of the package of measures, they will now be presented in July 2021. During her speech Commissioner McGuinness shares some further elements of the Commission’s plans, emphasising that these are subject to confirmation. Points of interest in the speech include:
- a single AML and CTF rulebook: the rules for the private sector are to be laid down in a directly applicable EU Regulation. In most areas, the same rules will apply across the EU. In other areas, there will be some margin for member states in how they organise their system, especially around the working of national supervision and financial intelligence units (FIU);
- an EU-wide upper limit of EUR10,000 will be set for cash purchases; and
- an intended new AML authority, funded from fees from entities subject to AML rules, is to be launched in 2024, reaching full staffing in 2025 and starting direct supervision in 2026. The authority aims to combine supervisory and FIU co-ordination tasks. Among other responsibilities, it will be responsible for the direct supervision of certain financial sector entities operating cross-border that are in the highest risk category, it will have a regulatory role preparing technical standards and guidelines, and it will advise the Commission on AML risks outside the EU.
As well as the legislative package, Commissioner McGuinness also commented on the non-legislative areas of work covered by the action plan, as follows:
- the Commission intends to launch a consultation on information exchange and public-private partnerships, with a view to publishing guidance by the end of 2021;
- enforcement remains a top priority for the Commission, and it intends to commission studies on how the AML framework is implemented in each member state with the aim of basing its approach to enforcement on those findings; and
- a key priority is ensuring that beneficial ownership registers are running and fully populated; the Commission is also working on the cross-border interconnection between national beneficial ownership registers, which should start later in 2021.
Speech at the AML Intelligence Boardroom Series
INTERNATIONAL ASSOCIATION OF INSURANCE SUPERVISORS
Combating money laundering and terrorist financing – IAIS publishes revised application paper – 17 May 2021
The International Association of Insurance Supervisors (IAIS) has published for consultation a revised application paper on combating money laundering and terrorist financing.
The IAIS originally published the application paper in October 2013 to provide additional guidance regarding money laundering and terrorist financing risks affecting the insurance industry. Following various updates, in recent years, of the Financial Action Task Force (FATF) recommendations, and publication in 2018 of the revised FATF guidance for a risk-based approach in the life insurance sector, the IAIS revised ICP 22 (the insurance core principle on anti-money laundering and combating the financing of terrorism).
In light of these developments, the IAIS has amended the application paper. The amendments include updates to align terminology and to ensure consistency with the FATF recommendations, as well as new guidance on elements reflected in the latest version of ICP 22.
Comments can be made until 17 July 2021. The IAIS intends to hold a webinar on 2 June 2021 to discuss the paper.
Consultation paper: Revised Application Paper on Combating Money Laundering and Terrorist Financing
Redline version against 2013 paper
Webpage
FINANCIAL CONDUCT AUTHORITY
Financial crime – FCA publishes speech on rise in scams and their threat to a legitimate financial services industry – 18 May 2021
The FCA has published a speech given by FCA Executive Director of Enforcement and Market Oversight, Mark Steward, on the rise in scams and their threat to a legitimate financial services industry. Mr Steward noted that the FCA has a substantial role to play in preventing harm to consumers from unauthorised activities and explains how it has changed its approach to address scams. Points of interest in the speech include:
- the FCA has ratcheted up its proactive monitoring of the internet with a dragnet approach, with the express aim of capturing suspicious advertising on the same day, or 24 hours after it first appears;
- since the end of the Brexit transition period, many social media firms have been required to comply with the financial promotion restriction in section 21 of the Financial Services and Markets Act 2000 for the first time when providing any value adding services;
- the recent publication of the Online Safety Bill includes measures to tackle user-generated fraud, and if passed in its draft form it aims to provide, for the first time, a regulatory framework tackling user-generated online scams; and
- the FCA intends to continue to use its powers to pursue offenders.
Mr Steward also notes that scams and frauds are a threat to the legitimate financial services industry because their existence undermines the societal trust that is necessary for markets to work well.
FCA Speech: The rise in scams and the threat to a legitimate financial services industry
