The European Commission has published the third supranational AML / CFT risk assessment

The European Commission (“Commission”) has published its third supranational risk assessment on anti-money laundering and counter-terrorist financing (“AML / CFT”). This assessment consists of two documents: (i) a report and (ii) a detailed staff working document, which together provide a comprehensive identification of the risks present in all relevant areas, as well as recommendations to be implemented to eliminate the identified risks.

AML / CFT Risks

In the third edition of the supranational risk assessment, the Commission analyzed the risks of money laundering and terrorist financing, which in the EU internal market can be associated with 43 products and services divided into eight categories. These are the products and services identified in the Anti-Money Laundering Directive [credit and financial institutions, money remittance service providers, currency exchange offices, sellers of high-value goods and assets, real estate brokers, trust or company service providers, auditors, external accountants and tax advisors, notaries and other legal professionals, and gambling service providers] and several other products and services perceived as posing risks and thus relevant to the risk assessment in question [such other products and services are commonly included in national risk assessments around the world. These include the cash product category, as well as virtual currencies, crowdfunding and not-for-profit organizations. As in the previous (2019) supranational risk assessment, some informal means are also included in the scope of the assessment, such as those used by the hawala system and other providers of informal wealth transfer services, professional soccer, free ports, and citizenship and investor facilitation programs.

The mentioned products and services are divided into the following categories:

1. cash-related products and services (cash couriers, cash intensive business, high value banknotes, payments in cash and privately owned ATMs);
2. financial sector (deposit on accounts, retail and institutional investment sector, corporate banking, private banking, crowdfunding, currency exchange, e-money, transfers of funds, illegal transfers of funds, payment services, virtual currencies and other virtual assets, business loans, consumer credit and low-value loans, mortgage credits and high-value asset-backed credits, insurance (life and non-life) and safe custody services);
3. non-financial products and services (legal arrangements, high value goods, high value assets, couriers in precious metals and stones, real estate, services provided by accountants and legal services);
4. gambling sector;
5. non-profit organisations;
6. professional sports (professional football);
7. free zones;
8. investor citizenship schemes and investor residence schemes.

EU mitigating measures already in place or in the pipeline

The supranational risk assessment adopted most of the legislative measures mentioned in the two previous supranational risk assessments, in particular:

• the 5th Anti-Money Laundering Directive;
• the new Cash Controls Regulation;
• the Directive on Countering Money Laundering by Criminal Law;
• the Regulation on the introduction and the import of cultural goods;
• the Directive on access to financial and other information;
• the revision of the European Supervisory Authorities Regulations;
• the adoption of Directive (EU) 2019/2177, which amends the Solvency II Directive, the MiFID II Directive and the 4th Anti-Money Laundering Directive, and
• the adoption of the 5th Capital Requirements Directive, which removes the obstacles to cooperation between prudential and anti-money laundering/countering the financing of terrorism supervisors.

 The Commission plans to submit another report by 2024, in light of changes that may be made to the current EU regulatory framework. An assessment of how EU and national measures affect risk levels will also be the subject of the review.

Access to supranational AML / CFT Risk Assessment 2022:

Report from the Commission to the European Parliament and the Council on the assessment of the risks of money laundering and terrorist financing affecting the internal market and affecting cross-border activities can be found at the link below:

https://eur-lex.europa.eu/legal-content/PL/TXT/PDF/?uri=CELEX:52022DC0554&from=EN

The Commission’s working document accompanying the report, in turn, can be found at the link below:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52022SC0344

Questions or concerns – contact our law firm

If you have questions or need to update your organization’s internal AML/CFT procedure, we invite you to contact our office. Inquiries can be directed to: [email protected]