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AML-TF: improving supervision and detection

Day 1 Afternoon

Wednesday 03 April

Room :

Grand Ballroom - Roundtable


Adam Farkas
Executive Director, EBA
Public Authorities
Jesper Berg
Director General, Danish FSA
Līga Kļaviņa
Deputy State Secretary on Financial Policy, Ministry of Finance, Republic of Latvia
Liviu Voinea
Deputy Governor, National Bank of Romania
Industry Representatives
Duncan DeVille
Global Head of Financial Crimes Compliance, Western Union
William Morgan
Financial Crime Policy, Group Public Affairs, HSBC Holdings plc

Objectives of the session

To close certain loopholes in existing money laundering rules and to make it easier for the authorities to detect and stop suspicious financial flows, EU legislators had approved measures to combat terrorist financing, by preventing money laundering and tightening cash flow checks.

Furthermore, a 5th Anti Money Laundering Directive was adopted on 19 April 2018. It laid down notably that national prudential competent authorities and the SSM should conclude an agreement on the practical modalities for exchange of information. That agreement was agreed upon in January 2019.

The Directive also defined certain conditions for improving the exchange of information between banking supervisors and AML authorities, in particular addressing issues regarding professional secrecy obligations; in this respect it makes an important distinction between information exchange between (i) authorities in the same Member State and (ii) across Member States including the SSM.

The aim of the Commission is to reinforce the AML supervisory framework, by anchoring AML in prudential supervision and enhancing cooperation between AML supervisors and prudential ones. The Commission’s objective is to further:

  • Develop guidelines notably in terms of effective cooperation, identification of risks, and prudential supervision of AML risks;
  • Strengthen the AML supervisory framework by entrusting the European Banking Authority (EBA) with new powers and by requiring the EBA to act in certain domains.

Eventually, the EU Commission will conduct a more fundamental review of the AML supervisory framework at a later stage.

In this context, the Joint Committee of the three European Supervisory Authorities launched in November 2018 a public consultation on draft guidelines regarding the cooperation and information exchange between competent authorities. Such Guidelines propose in particular the creation of AML/CFT colleges of supervisors for AML supervision.

In parallel, the EBA has identified a number of areas where additional changes to the Capital Requirements Directive would be instrumental in addressing deficiencies in Union law: (i) better incorporation of AML into supervisory actions and (ii) better cooperation of AML authorities and prudential supervisors, (iii) institutional changes.

Therefore, the objectives of the Session are to take stock of all that has already been initiated, but also to identify what are the additional key initiatives from EU financial institutions that should contribute to significant progress in AML-TF in a context of recent serious breaches of AML rules.

Points of discussion

What are the main lessons learnt from the recent Money Laundering cases unveiled in the EU, notably regarding the respective responsibilities of host and home supervisors, the SSM, whether they are in the banking union or not…? Are information flows among the different authorities involved in the supervision of financial entities adequate? Are existing laundering risk assessment tools and indicators sufficient?

What are the main regulatory and supervisory evolutions envisaged by both the anti-money laundering action plan issued in November 2018 by the Council, and its December decision to reinforce EU supervisory arrangements? What are the expected roles of the ESAs and in particular of the EBA which should become the EU AML supervisory authority?

What are the remaining issues notably those regarding the consistency of sanctions, and the implementation of the AML framework in EU member states? Are the role and the powers of the ABE sufficient?

Is the current political impetus up to the challenge notably in the context of the US aggressive de facto extraterritorial jurisdiction and the forthcoming EU elections?