The European Banking Authority (EBA), an independent regulatory body focusing on financial stability across the European Union’s banking sector, has launched a public consultation on new anti-money laundering (AML) and countering the financing of terrorism (CFT) rules.
The consultation, announced on March 6, seeks feedback on four draft Regulatory Technical Standards (RTS) that will be part of the EBA’s response to a ‘call for advice’ it received from the EU’s executive arm, the European Commission, last Spring.
On May 30, 2024, the EU adopted its package of new AML/CFT rules, which included extending AML rules to new “obliged entities,” including most of the digital asset sector; tighter due diligence requirements; setting a limit of €10,000 ($10,891) to cash payments; and setting up a new European Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) that will have supervisory powers over high-risk entities in the financial sector.
On March 12, before publishing the new regime, the European Commission asked the EBA to advise on four specific mandates of the new AMLA. After providing its advice, the EBA is now seeking feedback on its proposed RTS.
The four mandates in question are:
- How risk is assessed for the purpose of selection for direct supervision – for which the EBA is proposing that the AMLA first determines which institutions are eligible for direct supervision, taking into account their cross-border activities.
- The methodology for assessing the risk profile of obliged entities – for which the EBA is proposing to put in place a “harmonised methodology that all national supervisors will apply when assessing an institution’s inherent risks.”
- Customer due diligence (CDD) requirements – for which the EBA is proposing a framework whereby institutions can choose the most appropriate approach, as long as it remains in compliance with AML regulation. For example, the EBA lists the types of documents and sources of information that institutions should consult, rather than specifying the documents and sources themselves.
- Pecuniary sanctions (monetary penalties) – for which the EBA is proposing measures to ensure that AML/CFT breaches are assessed similarly by all supervisors across the EU and that the enforcement action is “proportionate, dissuasive and effective.”
The consultation called for “interested stakeholders” to submit comments to the EBA by June 6, 2025. All contributions received will be published at the end of the consultation period, and the EBA will submit its response to the European Commission on October 31, 2025.
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