The European Banking Authority (EBA) has started a public consultation to review its guidelines on money laundering and terrorist financing risk factors.
According to EBA, the proposed amendments are set to include crypto-asset service providers (CASPs) within their scope. The consultation is open until 31 August 2023, inviting feedback on the significant ML/TF risks that CASPs and other financial institutions may be exposed to.
CASPs pose a heightened risk profile due to the use of innovative technologies, the ability for instant worldwide transfers of crypto assets, and services that incorporate privacy-enhancing features. EBA’s proposed amendments aim to establish common regulatory expectations for the measures CASPs need to implement to identify and mitigate these risks effectively.
The proposed changes include new, sector-specific guidance for CASPs, outlining factors that could suggest a higher or lower ML/TF risk exposure. These considerations should be factored into CASPs’ ML/TF risk assessments of their business and customers both initially and throughout their business relationship. The guidelines also illustrate how they should tailor their customer due diligence (CDD) procedures to align with these risks. Additionally, the proposed changes offer guidance to other financial institutions on the risks associated with engaging with a CASP or dealing with crypto assets.
Further guidance for anti-money laundering/countering the financing of terrorism (AML/CFT) supervisors of CASPs will be provided through amendments to the EBA’s risk-based supervision Guidelines, open for consultation until 29 June 2023. These amendments will be supplemented by new guidelines to prevent the misuse of fund transfers for ML/TF purposes and on policies and procedures for compliance with restrictive measures.
Comments on the consultation paper can be submitted via the EBA’s consultation page until the deadline of 31 August 2023. A virtual public hearing on the consultation paper will be held on 7 June 2023.
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