EBA publishes final Guidelines on the role and responsibilities of the AML/CFT compliance officer

2 minutes

The European Banking Authority (“EBA”) published its final Guidelines on the role and responsibilities of the compliance officer (and the board) in the areas of Anti-Money Laundering (“AML”) and Combating the Financing of Terrorism (“CFT”) on June 14, 2022 (the “Guidelines“, see link). The Guidelines deal with the role of the compliance officer, but are in fact much broader than that.  The Guidelines apply to the vast majority of financial firms that fall within the scope of the Money Laundering and Terrorist Financing (Prevention) Act (‘Wwft‘). We expect that, in practice, the Guidelines will become important for the design of internal governance for financial institutions that fall within the scope of the Wwft. This is because some parts of the Guidelines go beyond the requirements of the Wwft and the current interpretations of the AFM and DNB.

 

The Guidelines set out expectations about the role, tasks and responsibilities of the compliance officer and the management of an institution. For example, certain requirements are set for the management board and the supervisory board, e.g. the supervisory board must ensure that a knowledgeable Wwft officer is appointed. The Guidelines also deal with the person within the management board responsible for the Wwft; for example, an institution must specify the tasks and responsibilities of this person. The Guidelines also address the duties and responsibilities of the compliance officer, and when the board of an institution should proceed to establish a compliance function based on proportionality criteria included in the Guidelines. When the institution is part of a group, the Guidelines require that a compliance officer be appointed at the group level. The duties and responsibilities of this compliance officer should also be specified. In addition, extensive reporting requirements will apply to the compliance officer.

 

The Guidelines also address, inter alia, the following topics:

 

  • The appointment of the compliance officer;
  • The suitability, skills and expertise of the compliance officer;
  • The duties and role of the compliance officer and the relationship between the compliance officer and other functions in the “second line”;
  • Outsourcing of the compliance function; and
  • The reporting lines between the compliance function and the board of directors and the supervisory board.

 

The Guidelines are complementary to Guidelines already in place from the European Supervisory Authorities on governance and suitability. On December 1, 2022, the Guidelines will enter into force. Six months after publication in all official languages of the EU, all supervisors will have to indicate whether they comply with the Guidelines. We recommend that market participants adjust internal policies and governance in time for the Guidelines to take effect. Therefore, market participants must start on this in the coming months.