Sectoral guidelines for retail banks

Risk factors – Sectoral guidelines for retail banks

EBA has published the final Guidelines under Articles 17 and 18(4) of Directive (EU) 2015/849 on simplified and enhanced customer due diligence. The Risk Factors guidelines give an overview on 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.

Product, service and transaction risk factors – Sectoral guidelines for retail banks

98.

The following factors may contribute to increasing risk:  

• the product’s features favour anonymity;  

• the product allows payments from third parties that are neither associated with the product nor identified upfront, where such payments would not be expected, for example for mortgages or loans;  

• the product places no restrictions on turnover, cross-border transactions or similar product features;  

• new products and new business practices, including new delivery mechanisms, and the use of new or developing technologies for both new and existing products where these are not yet well understood;

• lending (including mortgages) secured against the value of assets in other jurisdictions, particularly countries where it is difficult to ascertain whether the customer has legitimate title to the collateral, or where the identities of parties guaranteeing the loan are hard to verify;  

• an unusually high volume or large value of transactions.

99. The following factors may contribute to reducing risk:

• The product has limited functionality, for example in the case of:

a fixed term savings product with low savings thresholds;

a product where the benefits cannot be realised for the benefit of a third party;

iii. a product where the benefits are only realisable in the long term or for a specific purpose, such as retirement or a property purchase;

a low-value loan facility, including one that is conditional on the purchase of a specific consumer good or service; or

a low-value product, including a lease, where the legal and beneficial title to the asset is not transferred to the customer until the contractual relationship is terminated or is never passed at all.

• The product can only be held by certain categories of customers, for example pensioners, parents on behalf of their children, or minors until they reach the age of majority.
• Transactions must be carried out through an account in the customer’s name at a credit or financial institution that is subject to AML/CFT requirements that are not less robust than those required by Directive (EU) 2015/849.
• There is no overpayment facility.

Customer risk factors – Sectoral guidelines for retail banks

100. The following factors may contribute to increasing risk:  

• The nature of the customer, for example:

i. The customer is a cash-intensive undertaking.  

ii. The customer is an undertaking associated with higher levels of money laundering risk, for example certain money remitters and gambling businesses.

iii. The customer is an undertaking associated with a higher corruption risk, for example operating in the extractive industries or the arms trade.  

iv. The customer is a non-profit organisation that supports jurisdictions associated with an increased TF risk  

v. The customer is a new undertaking without an adequate business profile or track record.  

vi. The customer is a non-resident. Banks should note that Article 16 of Directive 2014/92/EU creates a right for consumers who are legally resident in the European Union to obtain a basic bank account, although the right to open and use a basic payment account applies only to the extent that banks can comply with their AML/CFT obligations and does not exempt banks from their obligation

to identify and assess ML/TF risk, including the risk associated with the customer not being a resident of the Member State in which the bank is based.22

vii. The customer’s beneficial owner cannot easily be identified, for example because the customer’s ownership structure is unusual, unduly complex or opaque, or because the customer issues bearer shares.  

• The customer’s behaviour, for example:

i. The customer is reluctant to provide CDD information or appears deliberately to avoid face-to-face contact.  

ii. The customer’s evidence of identity is in a non-standard form for no apparent reason.  

iii. The customer’s behaviour or transaction volume is not in line with that expected from the category of customer to which they belong, or is unexpected based on the information the customer provided at account opening.

iv. The customer’s behaviour is unusual, for example the customer unexpectedly and without reasonable explanation accelerates an agreed repayment schedule, by means either of lump sum repayments or early termination; deposits or demands payout of high-value bank notes without apparent reason; increases activity after a period of dormancy; or makes transactions that appear to have no economic rationale.  

101.

The following factor may contribute to reducing risk:

• The customer is a long-standing client whose previous transactions have not given rise to suspicion or concern, and the product or service sought is in line with the customer’s risk profile.

Country or geographical risk factors

102.

The following factors may contribute to increasing risk:  

• The customer’s funds are derived from personal or business links to jurisdictions associated with higher ML/TF risk.

• The payee is located in a jurisdiction associated with higher ML/TF risk. Firms should pay particular attention to jurisdictions known to provide funding or support for terrorist activities or where groups committing terrorist offences are known to be operating, and jurisdictions subject to financial sanctions, embargoes or measures that are related to terrorism, financing of terrorism or proliferation.

103.

The following factor may contribute to reducing risk:

• Countries associated with the transaction have an AML/CFT regime that is not less robust than that required under Directive (EU) 2015/849 and are associated with low levels of predicate offences.

Distribution channel risk factors

104.

The following factors may contribute to increasing risk:

• non-face-to-face business relationships, where no adequate additional safeguards – for example electronic signatures, electronic identification certificates issued in accordance with Regulation EU (No) 910/2014 and anti-impersonation fraud checks – are in place;
• reliance on a third party’s CDD measures in situations where the bank does not have a long-standing relationship with the referring third party;

• new delivery channels that have not been tested yet.

105. The following factor may contribute to reducing risk:

• The product is available only to customers who meet specific eligibility criteria set out by national public authorities, as in the case of state benefit recipients or specific savings products for children registered in a particular Member State.

Compliance & Geldwäschebeauftragter – Sectoral guidelines for retail banks

Unsere Praxisseminare Geldwäsche und Fraud – Basisseminar, Geldwäsche und Fraud – Aufbauseminar, Geldwäsche & Fraud – Update und Geldwäsche & Fraud – Forum verschaffen Ihnen einen umfassenden Überblick zu den aktuellen gesetzlichen Neuerungen und unterstützen Sie dabei, Geldwäsche- und Betrugsstrukturen zu erkennen, zu bewerten und rechtzeitig zu verhindern. In den Compliance-Seminaren wie Compliance, Compliance für Vertriebsbeauftragte, Neue Compliance-Funktion gemäß MaRisk oder auch Compliance im Fokus der Bankenaufsicht werden Ihnen die Ausgestaltung der Schnittstellen zwischen Compliance, Datenschutz, IT, Zentrale Stelle und Interner Revision näher gebracht. Auch die Mindestanforderungen zum Aufbau eines Gesamt-IKS werden hier beispielsweise näher erläutert.

Zudem haben Sie die Chance, nach Teilnahme der Seminare die Zertifizierungslehrgänge zum Compliance Officer, zum AML & Fraud Officer oder zum Geldwäsche-Beauftragter zu absolvieren.