On 1 September 2022, the European Banking Authority (EBA) published its second report on the functioning of anti-money laundering and counter-terrorist financing (AML/CTF) supervisory colleges in the EU.
The Fifth Anti-Money Laundering Directive (5AMLD) introduced an explicit requirement for competent authorities to cooperate with each other but did not provide a framework of how this cooperation should happen in practice. In December 2019 the European Supervisory Authorities produced guidelines on cooperation and information exchange between competent authorities supervising credit and financial institutions. These guidelines provide details how competent authorities should give effect to the cooperation requirements set out in 5AMLD, by establishing a framework for AML/CFT colleges.
The EBA’s report sets out findings and observations from EBA staff participation in AML/CFT college meetings and from its monitoring activities. In the report, the EBA sets out some of the good practices it has observed plus areas for improvement.
The report makes the following key findings:
- Although competent authorities are committed to implementing the AML/CFT colleges framework, they need to do more to ensure ongoing collaboration and proactive information exchange.
- Due to their immaturity, AML/CFT colleges are not yet fully embedded in supervisory processes.
- The report reminds supervisors of the importance to exchange information in colleges on an ongoing basis and without delay, particularly where material weaknesses in an institution’s AML/CFT framework have been identified.
- The report emphasises the need for colleges to be more organised in a more risk-sensitive manner with more frequent meetings being held for those cross-border institutions that are exposed to higher risks of money laundering/terrorist financing.