The ML/TF risks identified by the EBA include those that are applicable to the entire financial system, for instance the use of innovative financial services, while others affect specific sectors, such as de-risking. 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 Opinion, therefore, sets out recommendations to competent authorities aimed at closing these gaps.
Some of the risks identified in this Opinion, such as those associated with virtual currencies and innovative financial services, had already been identified in the previous two Opinions on ML/TF risks and continue to be very relevant today. Others are included in the Opinion for the first time, such as differences in the treatment by competent authorities of financial institutions’ involvement in facilitating or handling tax-related crimes (‘cum-ex/cum-cum’). The EBA also observes a continuing trend of de-risking, which has implications from a ML/TF, consumer protection and financial stability point of view.
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.
As a complement to this Opinion, 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 Opinion has been issued in accordance with Article 6(5) of (EU) 2015/849 (The Fourth EU Anti-Money Laundering Directive), which requires the EBA to issue an Opinion on the risks of ML and TF affecting the EU’s financial sector every two years. The Opinion and its associated report will inform the European Commission’s Supranational Risk Assessment (SNRA) and risk assessments carried out by competent authorities.