Anti-Money Laundering in The EU Financial Sector: EBA Publishes Fourth Biennial Opinion

On 13 July 2023, the European Banking Authority (EBA – hereinafter also referred to as the “Authority”) published its fourth biennial opinion on the risks of money laundering and terrorist financing in the EU financial sector (EBA/Op/2023/08 – hereinafter also referred to as the “Opinion”).

EBA has issued the Opinion in accordance with the Article 6(5) of Directive (EU) 2015/849 and Articles 16 and 29 of Regulation (EU) No 2010/1093, which require the Authority to issue an Opinion on the AML/CFT risks affecting the EU financial sector every two years. In its Opinion EBA outlined measures that could be taken by competent authorities and EU co-legislators to reduce the risks of money laundering and terrorist financing.

Since the EBA’s last opinion published in 2021, geopolitical events and technological progress caused a big impact on the financial sector’s exposure to financial crime. In its Opinion, EBA highlighted the changing risk landscape, also driven by geopolitical events, such as the Russian Invasion in Ukraine. Recalling the publication of the AML package by the European Commission on 20 July 2021 and the Regulation (EU) 2023/1114 (MiCAR) on crypto-asset markets, the Authority also focused on legislative developments in this field.

In particular, in its Opinion, EBA outlined that some of the AML/CFT-related risks, namely those related to crypto-assets, innovative financial services and identification of beneficial owners, had already been included in the Authority’s previous Opinions and are still relevant today, while other risks, including those related to Covid-19, are gradually diminishing.

As mentioned above, in the Opinion published on 13 July, the Authority submitted 23 proposals to the legislators and to the competent EU authorities to better address the risks in question and to strengthen the defences against financial crime in the European Union.

As part of these proposals, EBA called, inter alia, for the adoption of a common anti-money laundering and anti-terrorist financing regulation and the establishment of a dedicated EU anti-money laundering supervisory authority with direct supervisory powers.