EBA issues formal response to EC call for advice on AMLA mandates

The European Banking Authority (EBA) has issued a report with its formal response to the European Commission's (EC) March 2024 call for advice on six regulatory mandates under the forthcoming EU anti-money laundering and countering the financing of terrorism (AML/CFT) framework. The formal response aims to support the operational launch of the new Anti-Money Laundering Authority (AMLA) and includes the EBA's proposals for the draft regulatory technical standards (RTS) which the AMLA will ultimately adopt. These RTS separately cover: (i) methodologies for assessing inherent and residual money laundering/terrorist financing risks of obliged entities; (ii) risk assessment criteria for AMLA's selection of institutions for direct supervision; (iii) customer due diligence requirements; and (iv) classification of the severity of breaches and determination of pecuniary sanctions.

The EBA also provides preparatory input on two further mandates relating to group-wide information exchange and the base amounts for pecuniary fines. The draft RTS were developed by the EBA with a view to ensuring that regulation delivers effective and efficient outcomes, where legally possible. Responsibility for advancing the proposals now lies with AMLA, in consultation with the EC. Once adopted and endorsed, the instruments will provide a strong foundation for a resilient and well-functioning EU AML/CFT framework, aligned with AMLA's mandate and objectives. The report was accompanied by a letter to the EC explaining the rationale behind the EBA's approach to developing the draft RTS in the formal response.

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