Opinion of the European Banking Authority on the risks of money laundering and terrorist financing affecting the European Union’s financial sector
The Cyprus Securities and Exchange Commission (the ‘CySEC’) wishes with Circular C432 to inform Regulated Entities of the following:
The European Banking Authority (EBA) published its Opinion on risks of money laundering and terrorist financing (ML/TF) affecting the European Union's financial sector (the “Opinion”). The Opinion and its associated report will inform the European Commission’s Supranational Risk Assessment (SNRA) and risk assessments carried out by competent authorities.
The ML/TF risks identified by the EBA include those that are applicable to the entire financial system, while others affect specific sectors. The list also includes ML/TF risks that emerge from wider developments such as the COVID-19 pandemic that has an impact on both firms’ AML/CFT compliance and competent authorities’ supervision.
The COVID19 pandemic illustrates how new ML/TF risks can emerge unexpectedly and that can impact firms’ ability to ensure adequate AML/CFT compliance, and competent authorities’ ability to ensure the ongoing supervision of firms in the current context of restrictions on movement. Risks associated with COVID19, thus, require immediate attention and monitoring by competent authorities.
The EBA has developed an interactive tool, which gives European citizens, competent authorities and credit and financial institutions access in a user friendly manner to all ML/TF risks covered in the Opinion. The interactive tool is available here.
The CySEC expects that Regulated Entities take duly account and consult the Opinion and the interactive tool, as they are important sources of information which Regulated Entities must consider when identifying and assessing ML/TF risks on the basis of section 58A the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007- 2021.
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Written by Angeliki Georgiou, Independent Legal Consultant