The European Commission has published a communication on strengthening the EU framework for prudential and anti-money laundering (AML) supervision for financial institutions. In May 2018, the Commission invited the Chairpersons of the ESAs, the Chairperson of the AML Committee of the ESAs and the Chairperson of the Supervisory Board of the European Central Bank to establish a Joint Working Group to initiate a collective reflection on ways of improving the current framework for cooperation between AML and prudential supervisors. The proposed strategy in the communication is based on analysis carried out by this Joint Working Group.

The Commission is concerned that there is no clear articulation between the prudential and AML rules for financial institutions. It expresses that there is also a lack of efficient coordination on AML issues at a cross border and domestic level between authorities at different member states and third countries. Suggested strategies include:

  • increasing the role of the European Banking Authority (EBA) through reforms to the EBA Regulation to provide:
    • centralised AML expertise and resources at the EBA;
    • clarity on the scope and content of AML-related tasks;
    • additional AML-related powers and responsibilities for the EBA; and
    • giving the EBA an international co-ordination role on AML issues.
  • reforms to the proposed CRD V Directive, including:
    • supporting amendments tabled by the European Parliament relating to information exchange and a duty of cooperation between prudential and AML authorities and bodies; and
    • the Commission suggests that AML information should be explicitly covered by confidentiality waivers. If there are disagreements on cooperation and exchange of information, these should be referred to the EBA.

The proposal to strengthen the EBA's role will now be discussed by the European Parliament and Council. These targeted amendments will feed into the ongoing discussions of the Commission proposal to review the ESAs Regulations. The Commission encourages the European Parliament and the Council to reach agreement on these proposals swiftly.