In line with the new rules to tackle money laundering and terrorist financing (Regulation 2023/1113), on Thursday 14 November the European Banking Authority (EBA) unveiled two sets of guidelines that financial institutions established in the European Union will have to apply from late 2025 in order to comply with the financial and economic sanctions that the EU has adopted against natural and legal persons from third countries.
“Weaknesses in internal policies, procedures and controls expose financial institutions to legal, reputational risks, and undermine the effectiveness of the EU’s restrictive measures regimes, leading to potential circumvention and affect the stability and integrity of the EU’s financial system”, says the European authority in its document.
It therefore makes the following recommendations to all EU financial institutions: - put in place, implement and maintain up-to-date policies, procedures and controls for compliance with restrictive measures; - have a sound governance structure where responsibility for compliance with restrictive measures is clearly allocated; - carry out assessments of the financial institution’s exposure to restrictive measures.
This assessment does not exempt any legal or natural person from its obligation to freeze funds available to persons or entities subject to sanctions.
Crypto-assets. The EBA has also developed specific guidance for payment service providers and crypto-asset service providers in the EU.
These service providers must: - choose an adequate and reliable screening system to comply effectively with their restrictive measures obligations; - define the dataset to be screened against restrictive measures adopted by the EU and, where relevant, restrictive measures adopted at national level; - screen this information to verify whether a person or entity is designated; - manage the risks of violation and circumvention of restrictive measures.
See the guidelines: https://aeur.eu/f/eah (Original version in French by Mathieu Bion)