EBA consults on Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national sanctions

The European Banking Authority (EBA) has initiated a public consultation on two sets of guidelines regarding internal policies, procedures, and controls to ensure the effective implementation of Union and national restrictive measures. These measures, which include targeted financial sanctions and sectoral measures like financial and economic measures or embargoes, are mandatory for all entities under the jurisdiction of Member States. The guidelines aim to establish a common understanding for payment service providers (PSPs), crypto-asset service providers (CASPs), and their supervisors about the necessary steps for compliance.

The first set of guidelines is directed at financial institutions and prudential supervisors, focusing on the roles of senior management, internal governance, and risk management in relation to restrictive measures. The second set, targeted at PSPs and CASPs, details the required actions for compliance during fund transfers and crypto-asset transactions, with a special emphasis on know your customer (KYC), screening, and due diligence processes.

This consultation, which runs until 25 March 2024, is part of the EBA’s response to the European Commission’s legislative package from July 2021, aimed at reforming the EU’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework. This includes Regulation (EU) 2023/1113, which mandates the EBA to issue these guidelines for transfers of funds and crypto-assets. The EBA’s guidelines also address broader issues of internal control and risk management, ensuring effective implementation of restrictive measures while preventing operational and legal risks for financial institutions.

Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national restrictive measures

The Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national restrictive measures, which are binding on any person or entity under the jurisdiction of Member States, include two sets of Guidelines:

Guidelines addressed to financial institutions and prudential supervisors setting common, regulatory expectations regarding the role of senior management, internal governance and risk management in the restrictive measures context.
Guidelines addressed to PSPs and CASPs, setting out what PSPs and CASPs should do to be able to comply with restrictive measures when performing transfers of funds and crypto-assets and focus, in particular, on know your customer (KYC), screening and due diligence.

Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national restrictive measures

1. Compliance and reporting obligations

2. Subject matter, scope and definitions

3. Implementation

4. Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national restrictive measures

4.1 Governance framework and the role of the management body

4.1.1 The role of the management body in its supervisory function

4.1.2 The role of the management body in its management function

4.1.3 The role of the senior staff member in charge of compliance with restrictive measures

4.1.3.1 Appointing the senior staff member

4.1.3.2 The role of the senior staff member

4.2 Conducting a restrictive measures exposure assessment

EBA consults on Guidelines on internal policies, procedures and controls to ensure the implementation of Union and national sanctions