The European Supervisory Authorities (ESAs) for finance - EBA, ESMA and EOIPA - in their joint report on the withdrawal of authorisation of financial institutions, published on Wednesday 1 June, recommend changes to the regulatory framework to facilitate the fight against money laundering and terrorist financing in cases of serious breaches.
Several competent authorities want to see sector-specific regulations amended to include a specific legal ground relating to money laundering and the fight against terrorism.
The ESAs consider it appropriate in that case for competent authorities to be able to specifically examine the applicant’s exposure to money laundering and terrorist financing risk, including through cooperation and exchange of information with prudential supervisors. This additional assessment would be done for credit institutions as well as currency exchanges, insurance and crypto-assets.
Only Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD) actually provides explicit grounds for the withdrawal of authorisation, in the event of serious breach of anti-money laundering and anti-terrorist financing rules. According to the results of the survey, the competent authorities in the entire financial sector can only invoke non-specific grounds based on European or national law.
For insurance, EIOPA explains that this could result in a causal link with the actual insurance distribution activity.
As far as crypto-assets are concerned, the European supervisory authorities insist on the need to set up a system of enforcement of the ‘MiCA’ regulation governing crypto-asset markets (see EUROPE 12955/23), integrating money laundering and terrorist financing issues into the prudential supervision of the entities to be regulated.
To read the report: https://aeur.eu/f/1wl (Original version in French by Anne Damiani)