The European Banking Authority (EBA) recently published revised guidelines for money-laundering and terrorist-financing risk factors, including guidance on related risk assessments and customer due diligence (CDD) for beneficial owners.
The Guidelines are addressed to financial institutions and supervisory authorities and outline the factors that firms should consider when assessing the money laundering (ML) and terrorism financing (TF) risks associated with a business relationship or the occasional transaction. They also provide guidance on how financial institutions can adjust their customer due diligence measures to mitigate identified ML/TF risks to make them more appropriate and proportionate. Finally, they support competent authorities’ AML/CFT supervision efforts when assessing the adequacy of firms’ risk assessments and AML/CFT policies and procedures.
In this revised version, the EBA strengthens the requirements on individual and business-wide risk assessments and customer due diligence (CDD) measures, adding new guidance on the identification of beneficial owners, the use of innovative solutions to identify and verify customers’ identities, and how financial institutions should comply with legal provisions on enhanced customer due diligence related to high-risk third countries.
Also, the EBA included new sectoral guidelines for crowdfunding platforms, corporate finance, account information service providers (AISPs) and payment initiation services providers (PISPs), and firms providing activities of currency exchanges offices. The revised Guidelines also give more details on terrorist financing risk factors. Together, these changes will be conducive to implementing financial institutions of a more effective, risk-based approach to AML/CFT.
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