The European Banking Authority (EBA) has published a report taking stock of actions by all competent authorities to address its findings and recommendations.

This follows in-depth reviews carried out by the EBA over the last six years of all 40 competent authorities’ approaches to tackling money laundering and terrorist financing risks in banks across EU and EEA Member States.

The reviews resulted in recommendations where necessary to improve the effectiveness of anti-money laundering and counter terrorism financing supervision.

Overall, competent authorities have made significant progress in adopting a risk-based approach to AML/CFT supervision over the past six years.

Despite challenges that, in some cases, hampered reform efforts, most competent authorities now have dedicated AML/CFT strategies, targeted supervisory plans, and manuals guiding supervisors to ensure consistency across the sector.

They are also cooperating more effectively with relevant stakeholders at both national and international level.

Looking ahead, the new EU Anti-Money Laundering Authority (AMLA) will benefit from the EBA’s work, which has been instrumental in making AML/CFT supervision in the EU more effective.

In relation to AML/CFT supervision, competent authorities have taken notable steps to align national strategies and practices with EBA standards.

The findings suggest that supervisory manuals have been enhanced to ensure that AML/CFT supervision becomes more consistent and effective.

Most supervisors have also taken significant steps to use all supervisory tools available to them in a more strategic way.

However, in several cases, work is still underway to address recommendations stemming from these reviews.

Competent authorities have made substantial efforts to strengthen coordination and information exchange with relevant public authorities within their Member States, including authorities with shared supervisory responsibilities, financial intelligence units, and tax authorities.

The report also highlights significant progress in establishing sound and effective communication with competent authorities in other EU jurisdictions and third countries.

Nevertheless, in some Member States, further improvements are needed, particularly in relation to effective cooperation mechanisms with prudential supervisors.

The EBA’s reviews of competent authorities’ approaches have been conducted under Articles 1, 8(1), 9a, and 29(1) and (2) of the EBA Regulation.

These provisions give the EBA a duty to ensure effective and consistent supervisory practices, to contribute to the consistent and effective application of Union law, and to help prevent the use of the EU’s financial system for ML/TF purposes.

To this effect, the EBA can carry out peer reviews, investigate potential breaches of Union law, and conduct staff-led implementation reviews to assess competent authorities’ responses to specific compliance challenges.

The report concludes the EBA’s multiannual project of reviews of competent authorities’ approaches to tackling ML/TF risk in banks.

It provides AMLA with an up-to-date view of the state of AML/CFT supervision in the EU and forms the basis for indirect supervision that will fall to AMLA going forward.

The focus of the report is on AML/CFT supervision and cooperation, as standards on risk assessment and enforcement are expected to benefit from greater standardisation under the new EU AML/CFT framework.