The European Banking Authority (EBA), has published the announcement ‘Anti-money laundering and countering the financing of terrorism supervision is improving but not always effective yet, finds the EBA‘ on the report on competent authorities’ approaches to AML CFT supervision of banks.
Of course nothing is found in the latest report on the duty of the national supervisors to pay attention to mitigating the excessive costs of AML/CFT legislation for banks. No attention is paid either to another important item that should be relevant for national supervisors, being the consequences for the public that as a consequence of AML/CFT legislation amongst others is confronted by:
- de-risking by banks [*];
- passing on by banks of the costs of the AML/CFT customer due diligence to their clients;
- the lack of a system of accountability of banks to their customers on how they organise the due diligence and limit its costs.
It shows how the authorities are very occupied with each other; they are occupied with banks. Attention to the societal effects of AML/CFT is insufficient.
[*] In the report only mentioned once in passing:
One competent authority had identified a number of risk factors that it used as an indicator of the quality of banks’ AML/CFT systems and controls. For example, it used the number of customers rejected prior to the establishment of a business relationship per year as an indicator of robust AML/CFT controls. The competent authority had not considered whether this could also be an indicator of unwarranted de-risking.