Home / Regulatory Developments / Circular C219 (“the Circular”) dated 05.07.17 regarding (EBA, EIOPA and ESMA – European Supervisory Authorities (“ESAs”)) Guidelines on anti-ML and countering TF – “The Risk Factors Guidelines”

Circular C219 (“the Circular”) dated 05.07.17 regarding (EBA, EIOPA and ESMA – European Supervisory Authorities (“ESAs”)) Guidelines on anti-ML and countering TF – “The Risk Factors Guidelines”

Through the Circular, CySEC informs the Regulated Entities that the Joint Committee of the three ESAs, published on 26.06.17 its final guidelines on AML and CFT (the “guidelines”). These guidelines:

  • are essential to the European Union’s fight against ML/TF, as they set clear, regulatory expectations of the way credit and financial institutions should discharge important AML/CFT obligations and pave the way for a more effective and proportionate European AML/CFT regime that is consistent with international best practice and guidance;
  • are based on mandates in Articles 17 and 18(4) of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of ML or TF;
  • promote a common understanding of the risk-based approach to AML/CFT and set out how it should be applied;
  • are part of the ESAs’ wider work on fostering a consistent and effective approach to AML/CFT by both credit and financial institutions, and AML/CFT supervisors;
  • provide credit and financial institutions with the tools they need to make informed, risk-based decisions on the effective management of individual business relationships and occasional transactions for AML/CFT purposes;
  • provide guidance on the factors credit and financial institutions should consider when assessing the ML and TF risk associated with a business relationship or occasional transaction. In addition, they set out how credit and financial institutions can adjust the extent of their customer due diligence measures to mitigate the ML/TF risk they have identified.

Competent authorities will use these guidelines when assessing whether the ML/TF risk assessment and management systems and controls of EU credit and financial institutions are adequate.

Consequently, the ESAs will keep these guidelines under review and update them as appropriate. A first update is foreseen once amendments to Directive (EU) 2015/849 have been agreed.

CySEC’s expects that: The Regulated Entities shall take duly account and read ESAs Risk Factors Guidelines (accessible here), which will apply from 26.06.18 onwards.

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