United Kingdom (and EU regulation)

EBA report on NCAs’ approaches to AML/CFT supervision of banks

On 11 July 2023, the European Banking Authority (EBA) published a report which summarises the findings from the third round of anti-money laundering / countering the financing of terrorism (AML/CFT) implementation reviews.

In 2018, the EBA decided to review the effectiveness of Member State competent authorities’ (NCAs) approaches to the AML/CFT supervision of banks, and to use its findings to support individual NCA’s AML/CFT efforts. The first round of AML/CFT implementation reviews took place from November 2018 to October 2019 and covered seven NCAs from five Member States. The second round of reviews, during which seven NCAs from seven EU/EEA Member States were

assessed, took place from September 2020 to October 2021. The third round of reviews was carried out from January 2022 to December 2022 and included twelve NCAs from nine EU/EEA Member States.

The report highlights the following key findings from the third round of reviews:

Overall, NCAs are making progress in the fight against money laundering and terrorist financing (ML/TF).
Some NCAs in the EBA’s sample have made far-reaching changes in recent years, and their approach to ML/TF supervision of banks is now broadly effective.
Many NCAs have made tangible progress in tackling ML/TF risks through prudential supervision and most are on track to embed cooperation and information exchange in their supervisory processes.
Most supervisors in the 2022 sample were asked to do more to tackle ML/TF risk in their banking sector.
Several NCAs in the 2022 sample did not use their ML/TF risk assessments to inform their supervisory strategy and inspection plans.

The EBA entered its fourth and last round of implementation reviews of NCAs in 2023. After this round, the EBA will publish a final report, which will include an assessment of progress made since 2019.

The findings in the report will be relevant to all NCAs responsible for tackling ML/TF risks in credit and financial institutions across the Single Market. NCAs should consider these findings and recommended actions and adjust their approach to supervision where necessary.