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AML/CFT Supervision in Transition: EBA/CP/2025/04 on Anti-Money Laundering Supervision

Written by p400123 on . Posted in Uncategorised.

With System into the Future of Anti-Money Laundering Supervision: What EBA/CP/2025/04 Means for Banks and Financial Institutions Now

🧭 Why the New EBA Rules are Crucial

Europe is preparing for a new era in anti-money laundering supervision. With the planned Anti-Money Laundering Authority (AMLA) , a central authority for monitoring AML/CFT standards is being established in the EU for the first time. As part of this restructuring, the European Banking Authority (EBA) released the consultation paper EBA/CP/2025/04 on March 6, 2025.

The goal: to develop Regulatory Technical Standards (RTS) that will form the basis for the new tasks and powers of the AMLA. The consultation runs until June 6, 2025, thus defining the future rules for financial institutions, supervisory authorities, and other market participants.

Systematically into the future of anti-money laundering supervision

What Exactly Does EBA/CP/2025/04 Bring?

1. Redefining the Supervisory Landscape

  • The AMLA will assume cross-border supervisory functions over particularly high-risk institutions.
  • National supervisory authorities will retain tasks but must adapt their methods to the new European standards.
  • Uniform criteria for risk identification, resource allocation, and supervisory intensity will be introduced.

2. New Risk-Based Approach (RBA) and Risk Profile Assessment

  • Inherent Risk and Residual Risk will be assessed using a harmonized, automated scoring model.
  • Each institution will be classified as Low, Medium, Substantial, or High Risk.
  • Supervisory frequency will be differentiated: annual review for normal institutions, every three years for small, low-risk entities.

3. Selection for Direct AMLA Supervision

  • Two-Step Selection Process:
    • At least activity in six member states.
    • Residual Risk is determined using a weighted-aggregated model at the group level.
  • Thresholds for relevant activities under the freedom to provide services: over 20,000 customers or 50 million euros in transaction volume.

4. Customer Due Diligence (CDD)

  • Harmonization of information requirements for standard, simplified, and enhanced customer due diligence.
  • Focus on proportionate, risk-based implementation.
  • Use of electronic identification means (eIDAS) is foreseen, but alternative verifiable methods are permitted to ensure social inclusion.

5. Sanctions and Administrative Measures

  • Uniform criteria for classifying violations into four severity levels.
  • Harmonized calculation of fines and Periodic Penalty Payments (PePPs).
  • Special consideration of sanctions against natural persons (e.g., management boards).

Comparison: EBA/CP/2025/04 vs. EBA/GL/2021/16

Aspect Previous EBA/GL/2021/16 EBA/CP/2025/04 (planned)
Risk Assessment Flexible approach, heavily reliant on supervisory judgment Uniform automated scoring models (Inherent + Residual Risk)
Supervisory Frequency Principally risk-based, but often non-binding Annual or triennial review, mandatory
Direct Supervision Only national responsibility Direct AMLA supervision for cross-border high-risk institutions
Customer Review National differences in CDD Fully harmonized CDD standards (Standard, SDD, EDD)
Sanctions National autonomy in terms of amount and criteria EU-wide uniform criteria for severity levels and fines

Conclusion: What Should Decision-Makers Do Now?

The EBA consultation EBA/CP/2025/04 makes it clear: Anti-money laundering supervision is becoming more systematic, risk-based, and cross-border . Financial institutions, supervisory authorities, and compliance officers should already:

  • Review existing AML/CFT strategies and adapt them to new requirements.
  • Internationalize risk analyses and strengthen cross-border structures.
  • Dynamically set up internal compliance systems to be able to flexibly respond to new regulatory requirements.
  • Align training and further education specifically with the new requirements.

💡 Practical Example: What Does This Mean for a Medium-Sized Bank?

A medium-sized bank with branches in several EU countries must adapt its customer onboarding processes to the new CDD standards. It must establish an internal scoring system that objectively evaluates both the Inherent Risk and the quality of the controls. Additionally, it should prepare for the possibility of a direct audit by the AMLA and organize and train its compliance and risk management teams accordingly.

✅ Practical Checklist: Preparing for AMLA and EBA Standards

  • Have internal control systems been adapted for banks, financial institutions, and securities institutions to the new risk scoring models?
  • Have customer onboarding processes (CDD) been reviewed and aligned with harmonized EU requirements?
  • Have measures been implemented to prepare for possible direct AMLA supervision?
  • Is a strategy for proactive communication with supervisory authorities established?

✨ Tip: Join our special seminar “Fit for the AMLA: New Supervision, New Duties, New Opportunities” – Learn more →