EBA consults on draft RTS under EU's new AML package

The European Banking Authority (EBA) has published a consultation on proposed regulatory technical standards (RTS) under the EU's 2024 anti-money laundering (AML) package. The AML package consists of a Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AML Regulation), a Regulation establishing the Anti-Money Laundering Authority (AMLA) and the Sixth Money Laundering Directive (MLD6). The EBA is consulting on draft RTS that will inform its response to the European Commission's (EC's) call for advice, which it intends to submit to the EC on 31 October. The draft RTS on which the EBA is consulting, which are relevant to the financial sector, are:

• Draft RTS on the assessment of the inherent and residual risk profile of obliged entities under Article 40(2) of MLD6. The EBA is proposing a methodology for national supervisors to apply when assessing an institution's inherent risks, the quality of controls and the residual risks that remain after the controls have been applied.
• Draft RTS on the risk assessment for the purpose of selection of credit institutions, financial institutions and groups of credit institutions for direct supervision under Article 12(7) of the AMLA Regulation. The EBA is proposing that AMLA considers the cross-border activities of institutions and the money laundering/terrorist financing risk assessment methodology.
• Draft RTS under Article 28(1) of the AML Regulation on customer due diligence. The EBA is proposing a framework that gives institutions the ability to choose the appropriate approach, for example, by providing a list of types of documents and sources of information that institutions should consult, instead of specifying the documents and sources.
• Draft RTS under Article 53(10) of MLD6 on pecuniary sanctions, administrative measures and periodic penalty payments. The EBA is proposing a list of indicators that supervisors should consider when assessing the significance of a breach of a firm's AML requirements.

Responses to the consultation may be submitted until 6 June. The EBA is holding an online public hearing on the proposals on 10 April and invites interested stakeholders to register by 8 April if they wish to join.

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