On 16 November, the Joint Committee of the three European Supervisory Authorities published its final guidelines on the characteristics of a risk based approach to the supervision of antimoney laundering and countering the financing of terrorism (AML/CFT). The guidance, which is consistent with international AML/CFT standards, are addressed to the National Competent Authorities responsible for supervising compliance with AML/CFT obligations and outlines the steps which should be taken when conducting such supervision on a risk-sensitive basis. The Joint Committee is aware that the Competent Authorities are operating on limited resources and, for this reason, the guidance sets out how to allocate these resources in proportion to the risk.
Competent Authorities are required, under the guidelines, to adjust the focus, intensity and frequency of their supervisory actions following their identification and assessment of the exposure of their sector to risk. Suitably qualified staff are required in order to carry out these actions in an informed and consistent manner. Competent Authorities are reminded that they must look beyond the size or systemic importance of a credit or financial institution in their risk assessment.
A link to the guidance is here.