On 24 May 2024, the European Banking Authority (EBA) issued a report on virtual IBANs (vIBANs).

IBANs are commonly used as payment account identifiers across the EU. More generally, IBANs are mandated in some 60 jurisdictions in the world, with over 20 jurisdictions recommending its use for cross-border payments. The new Regulation on the prevention of the use of the financial system for money laundering or terrorist financing (AMLR) includes a definition of vIBANs for the anti-money laundering / countering the financing of terrorism framework. In the AMLR, a vIBAN is defined as ‘an identifier causing payments to be redirected to a payment account identified by an IBAN different from that identifier’.

Recently, the EBA carried out a fact-finding exercise on the issuance and use by payment service providers of vIBANs. The report now published summarises the EBA’s observations and findings from this fact-finding exercise. It highlights risks and challenges that vIBANs may present to consumers, financial institutions, Member State competent authorities (NCAs) and to the integrity of the overall EU financial system, based on the six most common vIBAN use cases in the EU. The report also includes recommendations on how EU law could be clarified and what actions NCAs could take to address these issues.