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On Wednesday the 19th of July 2023, the CySEC issued Circular C588 notifying regulated entities of the publication of the European Banking Authority’s fourth “Opinion on the risks of money laundering and terrorist financing (ML/TF) affecting the EU’s financial sector”. As per paragraph 17 of CySEC’s Directive, such opinions should be considered by regulated entities when implementing risk-based measures and procedures.

This opinion is issued every two years and serves to inform competent authorities’ application of the risk-based approach to AML/CFT supervision and the European Commission’s Supranational Risk Assessment.

In a nutshell, the opinion re-iterates the preservation of several risks identified in the 2021 opinion, recognizes new risks emerged from the geopolitical events and technological advances occurred in the last two years and provides a number of proposals for addressing these risks.

For Investment Firms particularly, the European Banking Authority advised the competent authorities to assess how to provide specific guidance to the sector to ensure that supervisory expectations regarding adequate and effective AML/CFT systems and controls are well understood and applied in line with the EBA’s Risk Factors Guidelines which contain further details.

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