ESAs consult on group wide AML standards

The ESAs are consulting on RTS for firms in groups straddling the EU and third-countries, where the law of a third country prevents the implementation of group-wide AML/CTF policies in branches or majority-owned subsidiaries.  Consultation closes on 11 July. The ESAs propose that firms must:

  • at least assess the ML/TF risk to their groups and keep the assessment up to date
  • make sure that assessment is reflected in their policies and procedures
  • get senior management consent to the assessment and
  • provide targeted training to relevant staff members in the relevant third country.

They should also tell their supervisors of problems they encounter, and take steps to see whether customer agreement can overcome legal hurdles. Where this is not possible, firms should put in place additional measures, such as getting senior management approval for certain business relationships, determining source of funds and carrying out enhanced monitoring.  If all this fails, then the business should not take place, which may ultimately lead to branch or subsidiary closure. The RTS address also data-sharing, information on suspicion reporting to authorities and record-keeping.