📢EUROPEAN BANKING AUTHORITY'S DRAFT RULES ON 6AMLD: IMPLICATIONS FOR FINANCIAL INSTITUTIONS

The European Banking Authority (EBA) has initiated a public consultation on four draft Regulatory Technical Standards (RTS) as part of its efforts to enhance the European Union's Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) framework.

This initiative aligns with the forthcoming Sixth Anti-Money Laundering Directive (6AMLD) and aims to standardise AML/CFT practices across EU member states. ​

Key Aspects of the Draft Regulatory Technical Standards

1. Assessment of Risk Profiles: The EBA proposes a harmonised methodology for national supervisors to evaluate the inherent and residual risk profiles of obliged entities. This approach seeks to ensure consistent and comparable risk assessments across member states, thereby enhancing the effectiveness of supervisory actions. ​

2. Selection Criteria for Direct Supervision by AMLA: The draft RTS outlines the criteria for selecting institutions to be directly supervised by the new EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). The selection process will consider factors such as cross-border activities and the outcomes of the standardised risk assessment methodology.

3. Customer Due Diligence (CDD) Standards: The EBA aims to harmonise CDD requirements by specifying the information that obliged entities must collect during standard, simplified, and enhanced due diligence processes. This includes guidelines on verifying customer identities using reliable and independent sources.

4. Sanctions and Administrative Measures: The draft RTS sets uniform criteria for imposing pecuniary sanctions, administrative measures, and periodic penalty payments. This ensures that enforcement actions are proportionate, effective, and consistent across the EU.

   
   

Implications for Financial Institutions

Financial institutions operating within the EU should prepare for the following implications:​

• Enhanced Compliance Obligations: The harmonisation of risk assessment methodologies and CDD requirements will necessitate updates to internal policies and procedures to align with the new standards.​

• Potential for Direct Supervision: Institutions with significant cross-border activities may be selected for direct supervision by AMLA, requiring readiness for more intensive regulatory oversight.

• Uniform Enforcement Measures: The establishment of consistent sanctioning criteria underscores the importance of robust compliance frameworks to mitigate the risk of penalties.

Next Steps

The EBA's consultation is open until the 6th of June 2025, providing stakeholders with an opportunity to contribute feedback on the proposed RTS. Financial institutions are encouraged to review the draft standards and assess their potential impact. The final standards are scheduled for submission to the European Commission by the 31st of October 2025. The AMLA will commence the first selection process on the 1st of July 2027 and is expected to start directly supervising select obliged entities in January 2028.

Staying informed and proactive in adapting to these regulatory developments will be crucial for financial institutions to ensure compliance and maintain operational resilience in the evolving AML/CFT landscape.​