The EBA consulted the public on its draft guidelines on policies and procedures in relation to the compliance management and the role and responsibilities of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) compliance officer. The EBA aims to comprehensively address the AML/CFT governance set-up at the EU level for the first time.
The members of the EACB welcome the opportunity to comment on these guidelines.
Taking into account the importance of these guidelines on the governance of cooperative banks, the EACB members looked carefully into the EBA draft guidelines, identified problematic provisions and suggested concrete improvements.
Overall, the timeline for the EBA guidelines is not favourable for obliged entities: taking into consideration that the EU Anti-Money Laundering Authority should be operational in 2024 and will issue new guidelines on this topic, it is not fully justified and in fact burdensome to require the obliged entities to first implement the EBA guidelines, and then the subsequently amended guidelines by the AMLA.
Moreover, we find the requirements related to the management body as set out in the guidelines problematic both from the legal and practical points of view: particularly as the board of directors can only have a collective legal responsibility in many jurisdictions. In our view, it is therefore risky to require a single board member to be responsible for AML matters, or, for that matter, for any single responsibility of the board. Such stipulations could in fact reduce the interest of the rest of the board to familiarise themselves with AML matters.
Finally, we emphasise the need to give a due consideration of the principle of proportionality, and well-functioning and risk-mitigating outsourcing models in decentralised banking sectors. As such this is very important for the model of cooperative banks, and their reliance on intragroup outsourcing. In this context, in order to enable small and medium-sized banks to continue to provide high-quality money laundering prevention in the future, it is essential to allow the outsourcing of the function of the money laundering officer in its entirety.
We kindly invite you to look into our position paper for more details.