Commission makes MLD4 RTS on third country risks

The Commission has published the final form of RTS under MLD4 aimed at better and more consistent measures in approaching ML/TF risk where credit or financial institutions have a presence in a third country whose laws do not permit group-wide policies. The RTS set the ideal minimum standards groups should attain, and how they should approach disclosures to regulators of the restrictions the third country laws impose.  The standards also require the closure of the branch or subsidiary where the risks cannot be effectively managed, and state that where it is possible for them to remain open, business should be restricted to the lowest risk business possible, and no other entity should rely on CDD carried out by the relevant office. Several other safeguards, including enhanced monitoring, risk assessments and the need for head office approval for certain business, are also included. The RTS, which take the form of a Regulation, will enter into force 20 days after publication in the OJEU (which has not yet happened).

Emma Radmore