EU Takes Another Step to Harmonize Anti-Money-Laundering Rules

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The European Union’s banking regulator has projected guidance for financial-sector compliance officers, different measurement successful the bloc’s effort to revamp its anti-money-laundering system.

The connection from the Paris-based European Banking Authority is the latest determination by the EU to harmonize anti-money-laundering rules crossed subordinate states and displacement implementation distant from nationalist authorities.

In July, the European Commission—the EU’s legislative arm—proposed creating an anti-money-laundering agency with direct supervisory authority implicit fiscal companies. The connection came aft duplicate scandals involving the Latvian slope ABLV and Denmark’s Danske Bank A/S prompted the bloc past twelvemonth to accidental it would make a EU-wide anti-money laundering rulebook.

The EBA’s proposal, released this week, kicks disconnected a nationalist consultation play that ends successful aboriginal November. Afterward, the bureau is expected to finalize the caller standards.

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“This is simply a measurement toward paving the mode for the caller EU-wide authority,” said David Pasewaldt, a Frankfurt-based white-collar defence lawyer astatine instrumentality steadfast Clifford Chance LLP.

While the EBA’s aboriginal relation successful addressing wealth laundering is up successful the aerial successful airy of plans to make a specialized anti-money-laundering agency, the guidance should person an contiguous interaction connected fiscal institutions, lawyers said.

The EBA said its astir 50-page connection for the archetypal clip comprehensively lists the EU’s regulatory expectations for however financial-sector companies should acceptable up and negociate anti-money-laundering and counter-terrorism-financing programs. The connection outlines a model for specified programs, with minimum requirements for the roles and responsibilities of compliance officers and absorption committee members.

Although immoderate subordinate states already person akin anti-money-laundering standards, the connection should beryllium adjuvant to fiscal institutions and their compliance officers owed to its thoroughness and specificity, according to Mr. Pasewaldt. “The level of item [the EBA’s guidance] contains is rather surprising,” helium said.

The projected guidance would necessitate 1 subordinate of a fiscal institution’s absorption committee to beryllium peculiarly liable for the company’s anti-money-laundering program, though the remainder of the committee would besides transportation responsibility.

It besides details the responsibilities of anti-money-laundering compliance officers, including successful the areas of conducting owed diligence connected customers and reporting suspicious transactions to nationalist authorities. Compliance officers should study straight to the company’s absorption board, according to the proposal.

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The projected guidance says that strategical decisions related to anti-money-laundering and counter-terrorism-financing programs shouldn’t beryllium outsourced to 3rd parties.

The EBA besides laid retired steps for nationalist authorities to take, specified arsenic vetting a compliance officers’ nonrecreational expertise erstwhile they are appointed to marque definite they are qualified.

One accent of the guidance is the request for banks to designate a radical compliance serviceman who is liable for harmonizing a fiscal institution’s attack to anti-money-laundering rules crossed subordinate states. That portion of guidance echoes a directive the EU issued successful 2015.

The EBA said it had analyzed money-laundering scandals and concluded that 1 origin was a deficiency of reporting lines betwixt institutions’ section offices and their radical absorption bodies.

The request places portion of the work for processing a consistent, EU-wide attack to anti-money-laundering standards connected fiscal institutions themselves, according to Jasper Helder, a lawyer astatine instrumentality steadfast Akin Gump Strauss Hauer & Feld LLP successful London.

“It is rather smart,” Mr. Helder said. “When you bash that, if you are the idiosyncratic wrong specified a multicountry fiscal instauration liable for the group’s anti-money-laundering program, would you privation to judge that your enactment has antithetic rules successful Country A than Country B? Of people not.”

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