Skip to main content Skip to navigation

Launching AI-driven Fraud Detection

EBA launches proposed guidelines on the role of AML/CFT compliance officers

Regulators & Key Institutions Knowledge & Training

On August 2nd the European Banking Authority (EBA) announced a three-month public consultation on a new set of guidelines for the role, tasks, and responsibilities of compliance officers responsible for anti-money laundering (AML) and countering the finance of terrorism (CFT).

The EBA’s proposed guidelines include:

  • Requiring companies to appoint a compliance officer at a managerial level with responsibility for anti-money laundering policies. 
  • Instructing AML/CFT officers to develop and maintain a money laundering and terrorist financing risk assessment framework – both for business-wide and individual risks.
  • Codifying a list of information that AML/CFT compliance officers should include inactivity reports to management. 
  • Empowering national regulators to request information that enables them to test the “adequacy and effectiveness of AML/CFT compliance officer function in line with these and other ESA [European Supervisory Authority] guidelines”.

The EBA’s move toward a more centralized oversight system reflects its concern that existing requirements set out in Directive (EU) 2015/849 – more commonly known as the 4th Anti-Money Laundering Directive (4AMLD) – have been implemented unevenly across different sectors of the EU’s financial system. With fifth and sixth AMLDs also now in force, the EBA may be acting to ensure these latest guidelines are applied more consistently. To learn more about 6AMLD, read our latest article.

Among the concerns raised in its report, the EBA highlights ineffective AML/CFT supervision due to poor connectivity between compliance officers and senior management in financial institutions. It also notes significant concern among national regulators about poor controls and persistent deficiencies in controls over time.

Once adopted, all financial institutions covered by the EU’s AMLDs will be affected. The EBA acknowledges the breadth of organizations this will impact, stating in the consultation that the provisions should be “applied in a manner that is effective and proportionate to the financial sector operator’s type, size, international organization, the nature, scope and complexity of its activities, and the ML/TF risks to which the financial sector operator is exposed.”

The EBA’s announcement builds on recent moves by the European Union to bolster its fight against money laundering, including plans set out in July to improve how regulators and financial institutions share data on money laundering and terrorist financing threats. The European Commission also recently announced plans for a new anti-money laundering authority (AMLA) to oversee AML/CFT efforts across the bloc.

Although the UK didn’t sign up to 6AMLD, it had been a signatory and supporter of earlier AMLDs, and any UK financial institutions operating in the EU will need to adhere to the EBA’s guidelines. Firms will also need to keep an eye on any requirements issued by UK regulators that may go beyond the EU’s guidance. It is therefore critical that firms ensure their AML/CFT frameworks can monitor and incorporate regulatory changes from both the EU and UK. Ensuring AML/CFT technologies are in place that enable officers to comprehensively monitor and communicate the effectiveness of their organization’s compliance initiatives will also support improved knowledge sharing across the business.

To learn more about AML/CFT and the changing regulatory landscape in the UK and EU, download our latest report

Originally published 05 August 2021, updated 06 May 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

Copyright © 2023 IVXS UK Limited (trading as ComplyAdvantage).