The EACB, having participated in the first consultation on Recommendation 16, welcomes the second Financial Action Task Force (FATF) consultation on this topic. EACB experts consider the revisions to Recommendation 16, which reflect stakeholder feedback from the 2024 consultation, to be generally positive, especially regarding the definition of a payment chain.
We nevertheless would like to see clarifications regarding a number of topics.
Further consideration should be given to the interaction between R.16 and the regional sanctions screening requirements. It is highly important that R.16 does not impose real-time sanctions screening of information accompanying fund transfers in relation to sanctions lists. In the European Union, in the lack of explicit exemptions, it is likely that financial institutions will continue screening cross-border payment transactions emanating from non-EU jurisdictions.
Additionally, the FATF should further consider applying the R.16 exemption to instant payments. As highlighted in our 2024 response, payment transfers and card payments present many similarities, thus leading to a comparable AML/CFT risk profile to payment transfers and instant payments.
We also have concerns regarding the application of R.16 to all cash withdrawals. With respect to cross-border cash withdrawals, we are of the opinion that a specific threshold should be implemented. Applying information requirements to all cash withdrawals would lead to a disproportionate burden on financial institutions.
On the timing of R.16, we welcome the FATF proposal to defer the entry into force of most or all new requirements until end-2030. We recommend a minimum transposition period of 36 months after incorporation into national law.
Please download the EACB response to see our full comments.