Summary of CySEC's Circular C432

Memo #08-2021
CySEC Circular No: C432

Date: 18/03/2021
Subject: Opinion of the European Banking Authority on the risks of money laundering and terrorist financing affecting the European Union’s financial sector
Purpose: To inform Regulated Entities that EBA published its Opinion on risks of money laundering and terrorist financing (ML/TF) affecting the European Union's financial sector.

In Summary:

CySEC has issued the Circular C432 on 16/03/2021 to inform the CIFs, ASPs, UCITS Management Companies, Internally managed UCITS, AIFMs, Internally managed AIFs, Internally managed AIFLNPs and the Companies with sole purpose the management of AIFLNPs, that the European Banking Authority (EBA) published its Opinion on risks of money laundering and terrorist financing (ML/TF) affecting the European Union's financial sector (the “Opinion”).

The Opinion is issued every two years.

The ML/TF risks identified by the EBA include those that are applicable to the entire financial system, for instance the use of innovative financial services, while others affect specific sectors, such as de-risking.
The list also includes ML/TF risks that emerge from wider developments such as the COVID-19 pandemic that has an impact on both firms’ AML/CFT compliance and competent authorities’ supervision.

This Circular C432 also notes that the EBA has developed an interactive tool, which gives European citizens, competent authorities and credit and financial institutions access in a user friendly manner to all ML/TF risks covered in the Opinion.

The CySEC expects that Regulated Entities take duly account and consult the Opinion as provided in paragraph 17 of the CySEC’s Directive for the prevention and suppression of money laundering and terrorist financing. It is an important source of information which Regulated Entities must consider when identifying and assessing ML/TF risks on the basis of section 58A the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007-2021, in order to improve the effectiveness and efficiency of their AML/CFT systems and controls.

The EBA's Opinion can be found on the following link:

The interactive tool can be found on the following link: https://tools.eba.europa.eu/interactive-tools/2021/powerbi/O_MLFT21.html 

Read the CySEC Circular C432

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