Response to consultation on Guidelines on risk factors and simplified and enhanced customer due diligence
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Risk factors (Title II, point 17.) – PayPal Europe supports the holistic approach and agrees that the presence of isolated risk factors does not necessarily move a relationship into a higher or lower risk category.
Customer risk factors (Title II, point 20. fourth bullet point) – PayPal Europe supports the risk factor but the end of the sentence (“or anyone associated with them may have handled the proceeds from crime”) is too vague and would be very difficult for the firms to monitor. We suggest ESA’s to stick to the wording already in use i.e. “family members and persons known to be close associates”.
Weighting risk factors (Title II, point 34. fourth bullet point) – PayPal Europe supports the weighting risk factors approach as it allows firms to enhance risks assessment methodology. However, we understand that the fourth bullet point does not allow firms to consider mitigation controls that would reduce the residual risk. We suggest ESA’s removing this bullet point.
a) Do you consider that these guidelines are conducive to firms adopting risk-based, proportionate and effective AML/CFT policies and procedures in line with the requirements set out in Directive (EU) 2015/849?
We have found these guidelines helpful, informed and focused on key areas of risk. We do however have a number of comments and have set these out below.Risk factors (Title II, point 17.) – PayPal Europe supports the holistic approach and agrees that the presence of isolated risk factors does not necessarily move a relationship into a higher or lower risk category.
Customer risk factors (Title II, point 20. fourth bullet point) – PayPal Europe supports the risk factor but the end of the sentence (“or anyone associated with them may have handled the proceeds from crime”) is too vague and would be very difficult for the firms to monitor. We suggest ESA’s to stick to the wording already in use i.e. “family members and persons known to be close associates”.
Weighting risk factors (Title II, point 34. fourth bullet point) – PayPal Europe supports the weighting risk factors approach as it allows firms to enhance risks assessment methodology. However, we understand that the fourth bullet point does not allow firms to consider mitigation controls that would reduce the residual risk. We suggest ESA’s removing this bullet point.
b) Do you consider that these guidelines are conducive to competent authorities effectively monitoring firms’ compliance with applicable AML/CFT requirements in relation to individual risk assessments and the application of both simplified and enhanced customer due diligence measures?
Yes, subject to our comments on both general guidelines and sector specific guidelines.c) The guidelines in Title III of this consultation paper are organised by types of business. Respondents to this consultation paper are invited to express their views on whether such an approach gives sufficient clarity on the scope of application of the AMLD to the various entities subject to its requirements or whether it would be preferable to follow a legally-driven classification of the various sectors; for example, for the asset management sector, this would mean referring to entities covered by Directive 2009/65/EC and Directive 2011/61/EU and for the individual portfolio management or investment advice activities, or entities providing other investment services or activities, to entities covered by Directive 2014/65/EU.
PayPal Europe supports the structure of the guidelines but has several comments on the Sectoral guidelines for electronic money issuers.Upload files
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