On November 8, the Joint Committee of the European Supervisory Authorities (ESAs) published a consultation paper on draft joint guidelines on cooperation and information exchange between national competent authorities (NCAs) supervision credit and financial institutions for the purposes of the Fourth Money Laundering Directive (MLD4)
MLD4 includes a high-level requirement for EU NCAs to cooperate with each other regarding the supervision of anti-money laundering/ counter-terrorist financing (AML/CTF), but it does not provide details as to how this cooperation should be fulfilled. The Fifth Money Laundering Directive (MLD5) has subsequently amended MLD4, so that the legal basis for the cooperation and exchange of information between NCAs has also been clarified and specifies that member states must not prohibit or unreasonably restrict the exchange of AML/CTF information or cooperation between NCAs. However, again as with MLD4, MLD5 does not set forth how such requirements should be achieved.
The ESAs have therefore proposed improved supervisory cooperation and information exchange through AML/CTF colleges, as well as guidelines clarifying how to achieve such requirements. The guidelines (referred to as The AML Colleges Guidelines):
- Set forth rules governing the establishment and operation of the AML/CTF colleges. They provide that all NCAs should identify firms that require an AML/CTF college to be established—and such colleges will provide a forum for cooperation and information exchange to those NCAs responsible for supervising the same firm in different jurisdictions;
- Define the process for bilateral exchanges of information where there are only two NCAs supervising a firm.
- Emphasize the need for AML/CTF supervisors and prudential supervisors to exchange information.
The ESAs will hold a public hearing on the draft guidelines at the European Banking Authority’s London offices on December 18. The consultation period closes on February 8, 2019.
The consultation paper is available here.