Duncan ScottEBA has opened a consultation on two new sets of guidelines which look to address the effective management of money laundering and terrorist financing risks when providing access to financial services. The aim of the guidelines is to ensure that customers, especially the most vulnerable ones, are not denied access to financial services without valid reason.
The first set of guidelines adds a new section to the EBA’s money laundering and terrorist financing risk factors guidelines, which set out what financial institutions should do to identify and tackle such risk. This new section will:
- help financial institutions understand how not-for-profits are organised;
- how they can be different from other customers; and
- what they can do to manage any money laundering and terrorist financing risks associated with such customers effectively instead of denying them access to financial services.
The second set of guidelines tackles the issue of effective management of money laundering and terrorist financing risks by clarifying the interaction between the access to financial services and institutions’ anti-money laundering and counter terrorist financing obligations, including in situation where customers, have legitimate reasons to be unable to provide traditional forms of identity documentation. In addition, they set out the steps institutions should take when considering whether to refuse or terminate a business relationship with a customer based on compliance grounds.