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  • European Supervisory Authorities Publish Opinion on AML/CTF Risks in EU Financial Sector
    The European Supervisory Authorities have published a joint opinion on the current anti-money laundering and counter-terrorist financing risks posed to the EU financial sector. The opinion is published in accordance with the requirements of the Fourth Anti-Money Laundering Directive, which requires the ESAs to publish a joint opinion on the AML/CTF risks affecting the EU’s financial sector every two years. The most recent previous opinion was published in February 2017.
    Identified risks are grouped into two broad categories: cross-sectoral risks and sector-specific risks. The ESAs (which consist of the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupation Pensions Authority) have identified risks that cut across financial sectors, including: (i) uncertainty generated by Brexit and the relocation of firms from the U.K. to EU-27 Member States; (ii) the development of financial technology and regulatory technology; (iii) divergences between national legal frameworks of the implementation of EU legislation aimed at targeting AML/CTF risks, and of the supervisory approaches to enforcing regulatory frameworks; and (iv) internal implementation of controls and risk management within firms, particularly with regard to customer due diligence measures.
    Sector-specific risks identified by the ESAs include: (i) inherent risk in the sector, including credit institutions, payment institutions, bureaux de change and e-money institutions which are the most vulnerable to AML/CTF risks; (ii) quality of controls and common breaches in the sector; (iii) overall risk profile of the sector, considering inherent risk and quality of controls; and (iv) emerging risks in the sector.
    The opinion also sets out the ESAs’ proposals for how national regulators might mitigate these risks. The recommendations suggest that regulators prepare for the arrival of new firms and activities into the EU-27 following Brexit, monitor developments in relation to virtual currencies and conduct assessments as to whether national regulators hold sufficient information about sectors facing AML/CTF risks and review their supervisory approaches if necessary. The ESAs have also developed an online interactive tool, available on the EBA’s website, to give national regulators and firms an overview of all AML/CTF risks covered in the joint opinion.
    View the ESA's Joint Opinion.
    View the ESAs' interactive tool.
    View details of the ESA's 2017 Joint Opinion.
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