On 27 April 2022, the European Banking Authority (EBA) issued a statement setting out what financial institutions and their supervisors can do to provide access to refugees from Ukraine to the EU’s financial system. It also sets out what financial institutions and supervisors can do to protect vulnerable persons from abuse by criminals and calls on financial institutions to ensure that compliance with the EU’s restrictive measures regime does not lead to unwarranted de-risking
The statement refers to the Temporary Protection Directive which was activated on 4 March 2022. This Directive gives refugees from Ukraine temporary EU residency and an associated right to access and use a payment account with basic features in line with Article 16 of the Payment Accounts Directive (2014/92/EU, PAD).
The statement notes that:
- When onboarding customers for a payment account with basic features, financial institutions may not need to obtain the prospective customer’s passport to verify their identity. Instead, they may be able to rely on alternative, independent documentation, such as evidence that a prospective customer is a refugee from Ukraine.
- Financial institutions may also be able to postpone the application of initial customer identification measures to a later date where the conditions in guidelines 4.41, 9.15, 10.18 of the EBA’s money laundering / terrorist financing risk factor guidelines are met (EBA ML/TF Risk Factors Guidelines).
- Financial institutions may also be able to mitigate the ML/TF risk associated with less robust or reliable identity documentation in situations that do not present a lower ML/TF risk by setting up stricter monitoring controls, by offering a more limited range of services or by restricting the functionality of certain products at least temporarily, for example by imposing monthly turnover limits, or limiting the amount of person-to-person transfers. Guidelines 4.9 and 4.10 of the EBA’s ML/TF Risk Factors Guidelines and the EBA’s 2016 opinion on the application of customer due diligence measures for asylum seekers have further details.
The statement also notes that financial institutions should be alert to any indicators that suggest that customers who are refugees are being exploited and report any suspicious activity to their local financial intelligence unit without delay. Examples of such indicators include recurring payments for wages at unreasonably low amounts and unusual patterns of money transfers.