The EACB welcomes the opportunity to comment on the EBA draft Guidelines on ML/TF risk factors on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions. We compliment the EBA on the careful consultation process in its effort to extend the scope of the Guidelines to crypto-asset service providers (CASPs).
Nevertheless, the EACB would like to draw the EBA’s attention to several concerns that it has identified with the proposed guidelines. Our comments cover the following amendments:
- Amendments to Guideline 4 - CDD measures to be applied by all firms: Concerning the modification of Guideline 4.60, there are situations in which credit institutions do not have all information on the underlying transaction (e.g., correspondent relationships/customers of the respondent), which makes difficult to detect and assess unusual patterns of transactions. On the proposals on Guideline 4.74, further clarifications are needed concerning its scope of application, especially in the situation in which the financial institution does not offer crypto asset services and does not have relationships with CASPs.
- Amendments to Guideline 8 - Sectoral guideline for correspondent relationships: The proposed amendment to Guideline 8.17 c) will exceed the scope of due diligence responsibilities that should be expected from correspondent relationships, e.g., the performance of sample testing and/or on-site inspections. Consequently, the amendment does not allow a clear separation between the role of supervisory entities and the one of banks.
- Amendments to Guideline 9 - Sectoral guideline for retail banks: Guideline 9 should allow a more risk-based and proportionate approach. It should also take into consideration that new regulatory frameworks concerning the definitions of VASPs were only adopted recently, which makes difficult to assess the level of compliance of VASPs with AML/CTF requirements.
- Amendments to Guideline 21 - Sectoral guideline for crypto asset services providers (CASPs): Adding as a risk factor the use of FX transaction prior to and/or after making a conversion from fiat to crypto currency and vice versa in Guideline 21 would allow more clarity in the typologies.