Anti-money laundering: EBA calls for more cooperation between supervisors and counter-terrorist experts

• EBA observes that most competent authorities have devoted resources to ensure effective functioning of anti-money laundering and counter-terrorist financing (AML/CFT) colleges. 
• EBA finds that ongoing cooperation and proactive information exchanges between supervisors has not been fully achieved yet in all AML/CFT colleges.
• EBA recommends the organisation of AML/CFT colleges to be more risk-based.

The European Banking Authority (EBA) published today its second report on the functioning of AML/CFT supervisory colleges in the EU. The Report finds that, although competent authorities are committed to implementing the AML/CFT colleges framework, they need to do more to ensure ongoing collaboration and proactive information exchange within colleges.

This Report sets out findings and observations from EBA staff participation in AML/CFT college meetings and from its monitoring activities. In the report, the EBA sets out its observations of good practices with an aim to help competent authorities to enhance their effectiveness in future. These include well-structured and organised college meetings by lead supervisors, pro-active participation and sharing of comprehensive information by some members and an effective involvement of prudential supervisors in some colleges.

The report also highlights areas for improvement. In particular, it points out that, due to their immaturity, AML/CFT colleges are not yet fully embedded in supervisory processes. The Report reminds the supervisors of the importance to exchange information in colleges on an ongoing basis and without delay, particularly where material weaknesses in the institution’s AML/CFT framework have been identified. It also emphasises the need for colleges to be organised in a more risk-sensitive manner with more frequent meetings being held for those cross-border institutions that are exposed to higher risks of ML/TF.

Legal basis and background

• Directive (EU) 2018/843 (AMLD) introduced an explicit requirement for competent authorities to cooperate with each other but did not provide a framework of how this cooperation should happen in practice. The ESAs Guidelines (JC 2019 81) on cooperation and information exchange between competent authorities supervising credit and financial institutions published in December 2019 provide details how competent authorities should give effect to the cooperation requirements set out in AMLD, by establishing a framework for AML/CFT colleges.
• Colleges are permanent structures that serve to enhance cooperation between different supervisors involved in the supervision of cross-border institutions. The outcomes of the various ML/TF scandals involving various European banks, showed that the absence of such cooperation would often lead to ML/TF risk not being identified and addressed in good time.
• In 2021, a total of 227 AML/CFT colleges were established and the EBA is a member of each college. The EBA attended meetings of 37 colleges and provided feedback to the lead supervisors on the effectiveness of each college. In addition, the EBA provided technical support to all colleges and worked to raise awareness of AML/CFT colleges through presentations, training events and workshops.