EBA REPORT ON THE FUNCTIONING OF ANTI-MONEY LAUNDERING AND COUNTERING THE FINANCING OF TERRORISM COLLEGES IN 2022 EBA/REP/2023/31

The guidelines (JC 2019 81) on cooperation and information exchange for the purpose of Directive (EU) 2015/849 (AMLD) between competent authorities supervising credit and financial institutions (the ‘Guidelines’) were published by the three European Supervisory Authorities in December 2019. The Guidelines set out the cooperation framework, which includes AML/CFT colleges. AML/CFT colleges are permanent structures that bring together different supervisory authorities responsible for the AML/CFT supervision of a cross-border financial institution, which operates in at least three Member States. The aim is to ensure that supervisors exchange information in a timely manner, and that they cooperate to achieve better and more targeted supervisory outcomes in the fight against financial crime.

In 2020, 18 AML/CFT colleges were fully operating. By December 2022, the number of fully operating colleges had increased to 229. EBA staff was also notified of 54 additional colleges which had not yet held their first meeting but would hold such meeting in the course of 2023. Through 2022, EBA staff actively monitored 16 of those colleges, and carried out a thematic review of 10 investment funds colleges. EBA staff also collected data on all AML/CFT colleges to assess their performance against six action points that the EBA had issued in 2022 to address the findings of the second report on AML/CFT colleges.

The EBA found that competent authorities had taken important steps to make AML/CFT colleges useful and effective. A structured approach to organising colleges’ meetings had contributed to the exchange of more substantive, actionable information, than was the case previously, and prudential supervisors and FIUs had actively participated in most AML/CFT colleges, to which they had been invited. In several colleges, the quality of discussions was greatly enhanced, and the lead supervisor was leading these discussions much more effectively. A small number of colleges had taken coordinated actions to address areas of common concern with good outcomes. Nevertheless, none of the 2022 action points have been fully addressed by all colleges. In particular, EBA staff observed that:

• More than 50 AML/CFT colleges which had been set up pursuant to the Guidelines were still not operating, and members’ ability to share information in some colleges was hampered by their failure to sign the requisite cooperation agreements.  The number of third country observers remained very low, which could limit what supervisors know about group-wide risks.

• There was limited awareness among some competent authority staff of the benefits of sharing information in the colleges’ setting and some competent authorities were unable to explain how they used information from AML/CFT colleges in their own work. Common approaches or coordinated actions were rarely envisaged or discussed because members did not determine whether the issues identified had a common root cause.

• Several lead supervisors had not adjusted the nature and frequency of meetings based on the ML/TF risks to which the financial institution had been exposed. This meant that some high-risk colleges met infrequently, while colleges set up in relation to lower risk institutions met at least biannually.

Based on these findings, the action points adopted in 2022 remain relevant for the 2023-2024 period. Lead supervisors should address them without delay to make the best use of the AML/CFT colleges framework. The examples of good practice highlighted in this report can be useful for competent authorities in this regard.