EU Commission advised to establish a single rulebook on fighting money laundering and terrorist financing

The European Commission issued this call for advice to the EBA to take advantage of its technical expertise across all areas of financial services regulation and because the EBA has a legal duty to lead, coordinate and monitor the EU financial sector’s fight against ML/TF.

In its advice, the EBA sets out how the EU legal framework should be strengthened to tackle vulnerabilities linked to divergent national approaches and gaps in the EU defences against money laundering and terrorist financing (ML/TF).

Specifically, the EBA recommends that the Commission establish a single rulebook to:

• Harmonise the EU legal framework in a directly applicable Regulation where evidence suggests that divergence of national rules and practices has had a significant, adverse impact on the prevention of the use of the EU’s financial system for ML/TF purposes. This is the case for customer due diligence and wider AML/CFT systems and controls requirements, as well as for those rules governing key supervisory processes such as ML/TF risk assessments, cooperation and enforcement;
• Strengthen aspects of the current AML/CFT Directive where existing provisions are insufficiently robust or specific, for example in relation to competent authorities’ supervision powers in this area;
• Review the list of obliged entities currently within the scope of the EU’s AML/CFT regime;
• Clarify provisions in sectoral financial services legislation to ensure they are compatible with the EU’s AML/CFT objectives, for example by making sure that ML/TF risk is addressed consistently across all sectors.

With this Opinion, the EBA complements its response to the European Commission’s consultation on its AML/CFT Action Plan , which advises on how to be effective and efficient in establishing a new EU AML/CFT supervisor by building on existing AML/CFT infrastructures.