EBA publishes fourth Opinion on money laundering and terrorist financing risks across the EU

EBA published its fourth biennial Opinion on the risks of ML/TF affecting the EU’s financial sector. The Opinion identifies new and emerging risks in the financial landscape, which have been influenced by geopolitical events, legislative developments, and technological advancements.
Key points from the EBA’s report are as follows:
– Changed Risk Landscape: The risk landscape has been impacted by events such as Russia’s invasion of Ukraine, legislative developments like the comprehensive ‚AML Package‘ and MiCAR, as well as emerging risks related to corruption, environmental crime, and cybercrime.
– ML/TF Risks: The Opinion identifies various ML/TF risks, including those associated with crypto assets, innovative financial services, identification of beneficial owners, and terrorist financing. Some risks have decreased, such as those associated with Covid-19 and de-risking.
– AML/CFT Compliance Challenges: While awareness of ML/TF risks is increasing, the AML/CFT systems and controls in place are not always effective. Institutions face challenges in transaction monitoring and reporting of suspicious transactions.
– AML/CFT Supervision: AML/CFT supervision is improving, with more AML/CFT supervisors conducting formal ML/TF risk assessments in line with EBA Guidelines. However, there are challenges in ensuring supervision is commensurate with perceived risks and effective overall.
– Cooperation and Initiatives: Cooperation of AML/CFT supervisors with other authorities has improved, thanks to EBA initiatives such as AML/CFT colleges and supervisory cooperation guidelines.
The EBA’s report includes 23 proposals to address these risks and strengthen the EU’s financial crime defences. The report covers specific risks across different financial sectors, including credit institutions, payment institutions, e-money institutions, bureaux de change, investment firms, CIS, and more.