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

In July, the European Fee—the EU’s legislative arm—proposed creating an anti-money-laundering agency with direct supervisory authority over monetary corporations. The proposal got here after twin scandals involving the Latvian financial institution ABLV and Denmark’s

Danske Financial institution

A/S prompted the bloc final yr to say it will create a EU-wide anti-money laundering rulebook.

The EBA’s proposal, launched this week, kicks off a public session interval that ends in early November. Afterward, the company is anticipated to finalize the brand new requirements.

“This can be a step towards paving the way in which for the brand new EU-wide authority,” stated David Pasewaldt, a Frankfurt-based white-collar protection lawyer at legislation agency Clifford Likelihood LLP.

Whereas the EBA’s future function in addressing cash laundering is up within the air in gentle of plans to create a specialised anti-money-laundering company, the steering ought to have a direct impression on monetary establishments, attorneys stated.

The EBA stated its practically 50-page proposal for the primary time comprehensively lists the EU’s regulatory expectations for the way financial-sector corporations ought to arrange and handle anti-money-laundering and counter-terrorism-financing applications. The proposal outlines a framework for such applications, with minimal necessities for the roles and duties of compliance officers and administration board members.

Though some member states have already got comparable anti-money-laundering requirements, the proposal ought to be useful to monetary establishments and their compliance officers on account of its thoroughness and specificity, in response to Mr. Pasewaldt. “The extent of element [the EBA’s guidance] comprises is sort of stunning,” he stated.

The proposed steering would require one member of a monetary establishment’s administration board to be significantly liable for the corporate’s anti-money-laundering program, though the remainder of the board would additionally carry accountability.

It additionally particulars the duties of anti-money-laundering compliance officers, together with within the areas of conducting due diligence on prospects and reporting suspicious transactions to nationwide authorities. Compliance officers ought to report on to the corporate’s administration board, in response to the proposal.

The proposed steering says that strategic selections associated to anti-money-laundering and counter-terrorism-financing applications shouldn’t be outsourced to 3rd events.

The EBA additionally laid out steps for nationwide authorities to take, similar to vetting a compliance officers’ skilled experience when they’re appointed to ensure they’re certified.

One emphasis of the steering is the requirement for banks to designate a gaggle compliance officer who’s liable for harmonizing a monetary establishment’s strategy to anti-money-laundering guidelines throughout member states. That piece of steering echoes a directive the EU issued in 2015.

The EBA stated it had analyzed money-laundering scandals and concluded that one trigger was an absence of reporting traces between establishments’ native workplaces and their group administration our bodies.

The requirement locations a part of the accountability for creating a constant, EU-wide strategy to anti-money-laundering requirements on monetary establishments themselves, in response to Jasper Helder, a lawyer at legislation agency Akin Gump Strauss Hauer & Feld LLP in London.

“It’s fairly good,” Mr. Helder stated. “Once you do this, if you’re the person inside such a multicountry monetary establishment liable for the group’s anti-money-laundering program, would you need to settle for that your group has totally different guidelines in Nation A than Nation B? After all not.”

Write to Dylan Tokar at dylan.tokar@wsj.com