The three European Supervisory Authorities (ESAs) have agreed how the European Central Bank and Europe’s national competent authorities should exchange information on suspected money laundering.
The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority finalised the multilateral agreement on January 10. The agreement sets out protocols for sharing information between the ECB and different countries’ supervisory and regulatory authorities.
The agencies said in a joint statement that the new agreement was necessary under the European Union’s directive on anti-money laundering and countering the financing of terrorism (AML/CFT). The fifth version of the AML/CFT directive was passed in June 2018. It required the three ESAs to “support the conclusion of an agreement on the practical modalities for exchange of information between the ECB and CA”, or competent authorities.
The three ESAs said the new agreement included provisions on what kind of information should be exchanged and the process for doing so. They said it laid out “confidentiality and data protection provisions” and “situations where the request for information can be refused”, as well as a procedure for settling disputes between agencies.
Sharing information on AML/CFT matters between supervisors could potentially cause a number of problems under different countries’ supervisory and data protection laws. The agreement also spells out the means of communication between agencies.
“The agreement will create a clear framework for exchanging information between the ECB and [national competent authorities] and potentially will enhance the effectiveness of their supervisory practices,” the three agencies said. The agreement has now been sent to the ECB and to national competent authorities for their signature, under a process laid out in the text.
EBA’s lead role
The EBA was given the lead role by the European Commission in improving the bloc’s AML/CFT regime last year. The EC’s new policy calls for the EBA to co-ordinate the actions of national supervisors in preventing money-laundering and terrorist financing.
Some European lawmakers have called instead for the creation of a single European Union AML/CFT agency with powers to intervene across borders. The new policy follows a series of money-laundering scandals in EU countries, which led to political leaders calling for tougher AML/CFT measures.
Some financial crime experts have told Central Banking that the EU needs to pass a regulation on AML/CFT matters. In European law, directives lay out goals that member states must achieve, but give them freedom on transposing the necessary measures into law. Regulations have binding legal force in each member state by a certain date.