Money laundering and terrorist financing (AML/CFT) risks in the sector may not be effectively assessed and managed by payment institutions and their supervisors, the European Banking Authority (EBA) said in a report published on Friday 16 June.
EBA has examined how payment institutions identify and manage money laundering and terrorist financing risks and what supervisors do to mitigate these risks when considering an application for authorisation of a payment institution and during the life of a payment institution.
It therefore considered that the internal controls of these institutions were often insufficient to prevent money laundering and terrorist financing despite the risk inherent in the sector. It also found that not all the relevant authorities are doing enough to supervise the sector effectively. As a result, payment institutions with weak AML/CFT controls can operate in the EU. For example, they set up in Member States with less stringent authorisation and supervision procedures, so that they can then operate cross-border.
Read the report: https://aeur.eu/f/7ky (Original version in French by Anne Damiani)