EPIF welcomes this EBA Guidelines and we are supportive of the aim of establishing a formal framework to ensure effective cooperation and information exchange between prudential supervisors, AML/CFT supervisors and financial intelligence units thus enabling and facilitating the efficient and effective supervision and coordinated supervisory actions where necessary.
We agree on the importance of identifying synergies between the work of the different authorities and build on these synergies to foster a more effective approach to both, prudential and AML/CFT supervision, while avoiding unnecessary duplications and respecting the autonomy of the different authorities’ respective roles, tasks and competencies.
Having consistent guidelines across jurisdictions would improve also the feedback from National/Member State FIUs that is disseminated to obliged entities across a varied spectrum (i.e., informal and formal), which now can appear contradictory to written laws and regulations. Moreover, we believe that the feedback from National/Member State FIUs could be improved insofar as apparent inconsistencies between informal feedback and written guidelines, which can open obliged entities to reputational risk and non-compliance.
We would like to point out that, when filing STRs/SARs to report possible money laundering, terrorism financing, transactions considered to be “suspicious” under applicable law, and other transactions that may be the proceeds of crime, to law enforcement and other government agencies designated to receive such reports, expectations vary greatly by Member State, where some signal mere anomalies, but others suggest only detect well-grounded and substantiated criminal behaviours should be reported.
EPIF’s members operate in Member States where supervisory functions are housed in agencies that are separate from the agencies responsible for analysis of STRs, and in others where the functions are combined. EPIF is supportive of consolidation of AML/CFT supervision into an EU supranational supervisory agency. Such consolidation could leverage resources, help ensure consistent guidance and approaches to firms operating across Europe, and help the European authorities better manage ML/TF risks. It would be further beneficial if a single supervisor were to perform both safety and soundness supervision function and conduct-of-business regulation.
EPIF believes that obliged entities filing STRs/SARs across multiple Member States would greatly benefit from a centralized filing of STRs/SARs to a single contact point in the EU. EPIF’s members employ significant resources in ensuring differentiated Member State requirements and expectations (e.g., with respect to subject matter, format, etc.) are met. Standardized formats, thresholds, and a centralized and automated filing system could significantly improve the process for all stakeholders.
EPIF would like to point out that the rollout of this supervisory agency should occur after buy-in from national agencies so that the process does not become more complicated.
For financial institutions like our members who passport into multiple countries, there seems to be some lack of clarity associated with FIUs in countries where they are not registered but are passporting in, reaching out for information. The FIUs will reach out to them either directly or through our financial partners for confidential information when they cannot share the information with them. What our members would do is either file a SAR with the FIU of the country where they are regulated or ask for a court order but the non-regulated country FIUs do not necessarily understand that and that may be because the mechanisms are unclear.
With regard to the timelines for cooperation between the AML supervision and the Prudential supervisor in the context of their respective reviews of the Authorisation Application. The draft Guidelines say (at para. 48) that information requested from the AML supervisor in the context of an application for authorisation of an institution should be provided without undue delay in view of the short legal timeframe for the assessment of such application by the prudential supervisor. Ultimately, the maximum time within which the AML supervisor should respond may need to be more specific than "without undue delay" as this could lead to difficulties in terms of the absolute timeframe the Prudential supervisory authority has in which to make its decision on whether or not to authorise a firm.
On the duty of AML supervisors and Prudential supervisors to share relevant information with one another re sanctions (paras. 87 and 88). It would be helpful if examples could be given on the type of information to be shared as what might be deemed relevant by one supervisor or supervisory team may not be regarded as sufficiently important / relevant by another.