On 12 September 2018, the European Commission published a communication: Strengthening the Union framework for prudential and anti-money laundering (AML) supervision for financial institutions (the Communication). The Commission is concerned that gaps remain in the Union’s AML supervisory framework. In particular, concerns have arisen that there is no clear articulation between the prudential and AML rules for financial institutions. The Communication together with a legislative proposal (see our blog here) sets out the necessary steps to enhance the supervision of financial institutions in the EU for the purposes of combating money laundering and terrorist financing.
The Commission expresses that the adoption of the fifth AML Directive helped strengthen the EU’s supervisory framework, however a broader strategy is required to address the risks posed by money laundering. The strategy, based on an analysis by a Joint Working Group of European Supervisory Authorities (ESAs), primarily focuses on making the European Banking Authority (EBA) the sole authority for tackling money laundering. The Communication recommends:
- changing the Capital Requirements Directive to better support cooperation and information exchange between banks and prudential authorities;
- optimising the use of expertise and resources dedicated to AML related tasks of the ESAs by centralising them within the EBA;
- clarifying the EBA’s AML related tasks in detail in new founding regulation, as is the case in consumer protection;
- reinforcing the tools for the carrying out the AML , e.g. mandating periodic independent reviews by the EBA;
- supporting non-legislative measures by the ESAs in the short term to improve the supervision of the sector. This includes for the EBA to undertake a stock-taking exercise to allow for an overall identification of the various AML issues relevant from a prudential perspective;
- the European Central Bank concluding, with anti-money laundering supervisors, a multilateral memorandum of understanding on exchange of information by 10 January 2019, as required by the fifth AML Directive.
The Commission calls on the European Parliament and European Council to endorse the actions set out in the Communication and to adopt the supporting legislative proposals by early 2019.