Summary of CySEC's Circular C588
Memo #42-2023
CySEC Circular No: C588
Date: 19/07/2023
Subject: EBA’s Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the EU’s financial sector
Purpose: To inform the Regulated Entities that the EBA has published its fourth Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the EU’s financial sector.
In Summary:
CySEC has issued the Circular C588 on 18/07/2023 to inform the Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), UCITS Management Companies (‘UCITS MC’), Self-Managed UCITS (‘SM UCITS’), Alternative Investment Fund Managers (‘AIFMs’), Self-Managed Alternative Investment Funds (‘SM AIFs’), Self-Managed Alternative Investment Funds with Limited Number of Persons (‘SM AIFLNP’), Companies with sole purpose the management of AIFLNPs, Small Alternative Investment Fund Managers (‘Small AIFMs’) and the Crypto Asset Service Providers, that the European Banking Authority (‘EBA’) has published its fourth Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the EU’s financial sector (‘Opinion’).
The Opinion has been issued in accordance with Article 6(5) of (EU) 2015/849 (The Fourth EU Anti Money Laundering Directive), which requires the EBA to issue an Opinion on the risks of ML and TF affecting the EU's financial sector every two years.
The Opinion is based on data from January 2020 to January 2023, including 49 AML/CFT competent authorities’ responses to the EBA’s biennial ML/TF risk assessment questionnaire, submissions to the EBA’s EuReCA database and findings from the EBA’s ongoing work to lead, coordinate and monitor the EU financial sector’s fight against ML/TF.
Some of the ML/TF risks identified in the Opinion, such as those associated with crypto assets, innovative financial services, the identification of beneficial owners and terrorist financing, had already been identified in previous Opinions on ML/TF risks and continue to be relevant today. Other risks that were highlighted in 2021, including those associated with Covid-19 and de-risking, are starting to decrease.
CySEC informs that, as per paragraph 17 of CySEC’s Directive for the prevention and suppression of money laundering and terrorist financing, information and reports, such as the Opinion, should be consulted when implementing appropriate measures and procedures on a risk-based approach, and implementing the customer identification and due diligence procedures.
CySEC further informs that it expects that Regulated Entities take due account of and consult the Opinion.
The EBA's Opinion can be found on the following link: https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Opinions/2023/1058335/EBA%20Op%202023%2008%20Opinion%20on%20MLTF%20risks%20EBA%20REP%202023%2021.pdf
Read the CySEC Circular C588
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