Joint report on the withdrawal of authorisations for breaches of AML/CFT compliance rules

The EBAs have recently published a joint report, which provides a comprehensive analysis of the completeness, adequacy and uniformity of the applicable laws and practices on the withdrawal of licenses for serious breaches of the AML/CTF rules.

In this respect, the joint report highlights the following points:

• To introduce a specific legal ground for revocation of licenses in all relevant EU sectoral laws
• To ensure AML/CFT compliance is a condition for granting authorization or registration
• To ensure cooperation and information exchange between prudential and AML/CFT supervisors is warranted all along the process
• The importance of the appropriate integration of AML/CFT issues into prudential regulation and supervision
• That the identification of a serious breach is subject to a case-by-case assessment by the AML/CFT supervisor.

Overall, the report clarifies that the decision to revoke licenses should be a last resort measure and should be based on a discretionary and proportionality assessment.

The joint report provides a preliminary analysis of the interaction between serious breaches of AML/CFT rules and the crisis management and resolution frameworks. As a general consideration, the report notes that in the case of a serious breach detected with an institution, the supervisors should focus on areas such as continuity of critical functions, maintenance of financial stability, protection of depositors and protection of clients’ funds and money.

The report also acknowledges that this is a novel issue, and several aspects deserve further consideration in order to assess the impact of resolution actions and powers in relation with serious AML/CFT breaches.

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Next steps

Currently the next steps pertaining to this report is the availability of the ESAs which is limited to the EU institutions requesting additional specific advice.

The EBAs do not provide any deadlines or specific dates for any of their forthcoming actions pertaining to the above.

Our Regulatory Watch is closely monitoring the efforts by the EBAs in this respect as well as the implementation of formalized guidelines

We will keep you informed on any changes in this respect and how this may affect our services. For the moment, no direct changes to our services are required.