EBA issues new guidelines to enforce travel rule

EBA issues new guidelines to enforce travel rule

The European Banking Authority (EBA) today announced the introduction of new Guidelines concerning the ‘travel rule’ for fund and crypto asset transfers.

This initiative aims to curb the misuse of financial transfers for money laundering and terrorist financing.

The ‘travel rule’ mandates that specific information must accompany transfers of funds or crypto assets. It details the obligations of payment service providers (PSPs), intermediary PSPs (IPSPs), crypto-asset service providers (CASPs), and intermediary CASPs (ICASPs) in identifying and addressing missing or incomplete transfer data.

The guidelines are designed to foster a uniform and effective enforcement of the travel rule throughout the EU, ensuring that transfers are fully traceable by authorities when needed to prevent, detect, or probe financial crimes.

In response to the Financial Action Task Force (FATF) standards, the EU updated its legal framework in June 2023 with Regulation (EU) 2023/1113. This regulation extends the scope of the travel rule to include detailed information about both the originator and beneficiary of transfers, particularly targeting crypto-asset service providers (CASPs).

EU authorities are required to report compliance with these guidelines within two months following the publication of official translations, with the amended guidelines set to be enforced from 30 December 2024.

The EBA is also finalizing guidelines on internal policies, procedures, and controls for CASPs to manage exposure to money laundering and terrorist financing risks effectively. This includes new directives on risk-based AML/CFT supervision of CASPs and other financial institutions.

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