By Vish Gain for AML Intelligence
THE EUROPEAN UNION’S upcoming AML supervisor is expected to have direct supervision over a number of cross-border entities deemed ‘risky’ by a future AML authority, the head of the European Commission’s financial crime unit has said.
Raluca Prună, who heads the European Commission’s Financial Crime Unit, told the ACAMS Europe conference Tuesday that the ‘risky’ entities are to be defined by a common risk metric determined by a future AML authority.
“The supervisor will also have indirect powers over the non-financial sector and may in exceptional circumstances take over supervision of entities that are deemed very risky and pose a problem for the integrity of the union’s financial system,” she told the conference.
Prună, who has previously served as Romania’s Minister of Justice, discussed the 6 pillars of the new Action Plan package that AML professionals need to be cognisant of ahead of its adoption on July 6 this year:
- Enforcement of existing rules
- A harmonised rule-book to apply to all EU member states
- EU-level AML supervision
- Coordination and support mechanism for financial intelligence units
- Law enforcement and information sharing
- A role for the EU at a global level
“Europe has one of the most advanced AML/CFT policies in the world,” she told the conference, adding: “Last year’s action plan was made to pave the way for a union-level policy with a strong political mandate from the parliament, council, and the main stakeholders in the financial sector.”
Amid concerns of added bureaucracy and complexities, she said that the EU-level supervisor is nothing to worry about for financial institutions and compliance professionals.
“The EU supervisor will not replace national AML supervision. Its sole purpose is to complement member states’ national efforts,” she said.
However, responding to a question on whether financial institutions will have to end up taking multiple regulatory exams from multiple supervisors, she said the EU supervisor’s assessment would be sufficient.
“Our intention is not to have competing supervisors over an entity. Once the EU supervisor supervises an entity, the role of the national supervisors end,” Prună told the conference.
“But this does not mean that there will be a lack of cooperation,” she added.
For financial intelligence units concerned about the upcoming overhaul, Prună said that an EU mechanism will support and coordinate the work of FIUs to improve the detection of money laundering and terrorism financing, especially in cross-border cases.
“The mechanism will also be a forum for exchanges of experiences, reviews, staff and provide elements for joint analysis of cases. The mechanism will be hosted together with the AML authority,” she said, adding that the principle of autonomy will be taken into account.
Non-legislative actions, such as guidance for PPPs, are expected to soon follow the adoption of the plan. “Not all PPPs are the same in nature, and we will keep that in mind when issuing guidance,” she said.
“Adoption will be preceded by a wide and focused public consultation. Guidance is not expected before late 2021 and won’t be legally binding.”
Although there is much uncertainty around the effect of Brexit on the new supervisory’s influence at a pan-Europe level, she clarified that the EU will be working closely with the UK through its involvement in the FATF — which counts fourteen EU member states in its list of founding members.
Funding for the new AML authority is still being discussed and is expected to be sourced from a mix of ‘fees’ and funds from the EU budget, she revealed, adding that there will be more clarity on the financial aspect later this year.
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