The European Banking Authority (EBA) has released a consultation paper on draft guidelines on the role of the AML/CFT Compliance Officer and the management body or senior manager of the AML/CFT officers under Article 8 and Chapter VI of the Directive (EU) 2015/849. The guidelines seek to clarify the Directive, with the aim of remedying uneven implementation across sectors and countries.
The closing date for comments is 2 November 2021. The EBA will finalise the guidelines once the consultation responses have been assessed.
The guidelines seek to clarify the roles and responsibilities of the AML/CFT compliance officer and management overseeing the AML/CFT function. Some of the main aims include:
- Specifying the responsibilities of the management body in its supervisory and managerial capacities, in overseeing the implementation of the AML/CFT internal governance framework for compliance and supervising the AML/CFT compliance officer’s work.
- Clarifying the function of the AML/CFT compliance officer as compared to other compliance functions. The guidelines state that the AML/CFT compliance officer should possess the resources, independence, and powers to ensure compliance. Additionally, the guidelines explain when and how a financial sector operator may outsource the AML/CFT compliance officer function or assign the role to an individual with additional roles.
- Laying out requirements for the AML/CFT function at the group level, including the relationship between the parent entity’s AML/CFT function and the subsidiaries’ AML/CFT compliance function. The guidelines state that the group should ensure that all policies and procedures are aligned, and that group-wide policies exist to ensure that subsidiary AML/CFT compliance officers report to the parent entity and have access to the parent entity’s AML/CFT compliance officer.
Much of the guidance reflects what it already understood by many in the industry as best practice. Hopefully the guidance will help provide further consistency across the EU and different types of financial institutions.
A common understanding of the role and responsibilities of AML/CFT compliance officers and the management body or senior manager, which is applied and enforced consistently, is important to ensure that financial sector operators in all Member States implement sound and effective AML/CFT systems and controls and to protect the EU’s financial sector from financial crime.