ESA call for "specific legal ground" to revoke licenses of AML/CFT violators

Three European Supervisory Authorities have called for the implementation of "specific legal ground" to revoke licenses of institutions found to have seriously violated AML/CFT regulations.

Recent cases have drawn attention to the "significant impact" serious breaches of AML/CFT regulations have on the management of supervised financial institutions, the ESAs said in a joint report.


Authorities have withdrawn authorisation for serious breaches of AML/CFT rules in 26 cases, according to the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Supervisory Markets Authority (ESMA).


According to the report, "there is consensus among competent authorities that the withdrawal of authorisation… for serious breach of AML/CFT rules is a last resort measure."

According to the report, authorities should assess the adequacy of arrangements to ensure AML/CFT compliance as a condition for granting authorisation or registration.


"Cooperation and information exchange between prudential supervisors and AML/CFT supervisors should be ensured," the ESAs have stated.


Similarly, the report emphasizes the importance of "appropriate integration" of AML/CFT issues into regulation and supervision, such as the Markets in Crypto-Assets Regulation (MiCA) proposal, which is currently under negotiation.


The ESAs have clarified the criteria for a serious breach of AML/CFT regulations to be considered and assessed by the AML/CFT supervisor for serious breaches of AML/CFT regulations.


The ESAs emphasized that the AML/CFT supervisor "needs to take into consideration the context of the breach," and that "no systematic correlation between a serious breach of AML/CFT rules and withdrawal of authorisation which is a last resort measure."

By fLEXI tEAM