Introduction and legal basis

1. This opinion sets out in high level terms how the European Banking Authority (EBA) expects prudential supervisors to take into account money laundering and terrorist financing (ML/TF) risks in the Supervisory Review and Evaluation Process (SREP). ML/TF risks that are particularly relevant to prudential supervisors include the risk that an institution is misused for ML/TF purposes by members of its management body or members of its staff, or by other parties, including beneficial owners, or criminals that use weaknesses in the internal governance and controls framework such as information and communication technology (ICT) related weaknesses.

2. Involvement of an institution or its management in money laundering and terrorist financing affects the financial soundness and viability of that institution, and impacts the stability and integrity of the financial system in which the institution operates. This is why Union law requires institutions to put in place effective systems and controls to prevent their use for money laundering or terrorist financing purposes.

3. Combating ML/TF requires certain actions from both AML/CFT and prudential supervisors. This is why Union law requires prudential supervisors and authorities or bodies that supervise institutions in accordance with Directive (EU) 2015/849 and are competent for ensuring compliance with that Directive (‘AML/CFT supervisors’) to cooperate and exchange information to inform their respective supervisory activities.