European Commission publishes report on the assessment of the risks of money laundering and terrorist finance affecting the internal market and cross-border activity

The report focuses on the supranational risk assessment (SNRA) of the risks of money laundering (ML) and terrorist financing (TF) affecting the internal market and relating to cross-border activities. It is the first report carried out at a supranational level in the EU and analyses the risks of ML and TF the EU could face and proposes a comprehensive approach to address them.

The following risks were identified:

• Forty products or services that are considered potentially vulnerable to ML/TF risks affecting the internal market. These cover 11 professional sectors, including
  1. the financial sector,
  2. the gambling sector,
  3. trust and company services providers,
  4. tax advisors,
  5. auditors,
  6. external accountants,
  7. notaries and other independent legal professionals, and
  8. Hawala banking.
• A number of vulnerabilities common to all sectors, including:
  1. anonymity in financial transactions;
  2. identification and access to beneficial ownership information;
  3. supervision within the EU internal market;
  4. lack of cooperation between FIUs;
  5. infiltration by criminals;
  6. forged documents;
  7. insufficient information-sharing between the public and the private sector;
  8. insufficient resources, risk-awareness and know-how to implement AML/CFT rules; and
  9. new risks emerging from FinTech.

The report makes a number of recommendations, including:

• Raising awareness.
• Providing updated guidance for internal governance and beneficial ownership investigation.
• Self-regulatory bodies should make efforts to increase the number of thematic inspections, reporting and organise training to develop a better understanding of the risks and AML/CFT compliance obligations.
• Member States should demonstrate that sufficient resources are allocated to supervisors and FIUs so that they can carry out their tasks.
• Increasing on-site inspections.
• Thematic inspections.

Source: European Commission, Report on the assessment of the risks of money laundering and terrorist finance affecting the internal market and cross-border activity, 26 June 2016. = http://bit.ly/2uJh7tS