AML/TF & CDD The Risk Factors Guidelines from the EU being updated [DRAFT]

The European Supervisory Authorities (ESAs) issue guidelines on key aspects of the risk-based approach. In June 2017, they published three ESAs issued Guidelines on risk factors and simplified and enhanced customer due diligence (JC 2017 37).

These guidelines set out factors’ firms should consider:

• When assessing the ML/TF risk associated with a business relationship or occasional transaction.

They also set out how:

• Firms can adjust the extent of their customer due diligence measures in a way that is commensurate to the ML/TF risks they have identified.

Since then, the applicable legislative framework in the EU has changed, and new risks have emerged and the EU introduces a number of changes that warrant a review of the Risk Factor Guidelines to ensure their ongoing accuracy and relevance:

• This is the case in particular in relation to the provisions on enhanced customer due diligence related to high-risk third countries.

To support firms’ AML/CFT compliance efforts and enhance the ability of the EU’s financial sector effectively to deter and detect ML/TF, these guidelines have been updated regarding: 

• Business-wide and individual ML/TF risk assessments; - customer due diligence measures including on the beneficial owner;
• Terrorist financing risk factors; and 
• New guidance on emerging risks, such as the use of innovative solutions for CDD purposes

Read the updated guidelines consultation:

• Consultation Paper Draft Guidelines under Articles 17 and 18(4) of Directive (EU) 2015/849 on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions (‘’The Risk Factors Guidelines’’), amending Guidelines JC/2017/37

• https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Consultations/2020/Draft%20Guidelines%20under%20Articles%2017%20and%2018%284%29%20of%20Directive%20%28EU%29%202015/849%20on%20customer/JC%202019%2087%20CP%20on%20draft%20GL%20on%20MLTF%20risk%20factors.pdf