The European Supervisory Authorities (ESAs) has established a multilateral agreement for the ‘practical modalities’ for information exchange between the European Central Bank (ECB) and AML/CFT competent authorities (CAs).
This agreement is focused on CAs which are responsible for supervising compliance of credit and financial institutions in regard to AML and CFT obligations, as part of AMLD4. Its aim is to create clear framework for the exchanging of information between the ECB and CAs in hope of creating increased effectiveness on supervisory practices.
Contained within the multilateral agreement are guidelines on the type of information needed to be exchanged and underlying process of doing so. It also outlines instances where a request of information can be declines, confidentiality and data protection provisions, communication tips for exchanges, how to settle dispute procedures, and support through the signing process.
AMLD4 was amended by AMLD5 in June last year, with a new Article 57 a(2) ‘requiring ESAs to support the conclusion of an agreement on practical modalities for exchange of information between ECB AND CAs.’
Another part of the changes in AMLD5 was that credit institutions and financial institutions being banned from keep anonymous accounts, passbooks or safe-deposit boxes, and existing ones are subject to due diligence. Other amendments were, the threshold for anonymous prepaid cards being lowered from €250 to €150, digital currencies like Bitcoin being made subject to money-laundering laws, and crypto wallets or trading platforms becoming susceptible to the same AML checks as all other providers.
In a recent interview with RegTech Analyst, ElectronicID CEO Iván Nabalón stated that business opportunities presented by AML5 are so substantial, financial institutions will adopt the standard significantly before the deadline.
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