The European Banking Authority (EBA) has announced a public consultation on the implementation of new anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. This is an important opportunity for industry stakeholders to provide their feedback on four draft Regulatory Technical Standards (RTS) related to the new regulatory framework. As the EU works to strengthen its efforts to combat money laundering and terrorist financing, this consultation process marks a pivotal moment for shaping future compliance standards across the continent.

EU Banking Regulator’s New Consultation on AML and CFT Rules

The EBA, an independent EU body tasked with ensuring effective regulation and supervision within the banking sector, launched this consultation on March 6, 2025. The public consultation is part of the EBA’s response to a ‘call for advice’ received from the European Commission in Spring 2024. It specifically addresses four key Regulatory Technical Standards (RTS) that will help define how various components of the new anti-money laundering and counter-terrorism financing measures will be enforced across the EU’s banking sector.

The new consultation follows the adoption of the EU’s updated AML/CFT regulatory package on May 30, 2024, which has far-reaching implications for financial institutions. These new regulations significantly extend the reach of AML rules, covering a broader spectrum of “obliged entities” such as most of the digital asset sector. The package also includes several critical components, including more stringent due diligence obligations, a cash payment limit of €10,000, and the establishment of the European Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), which will oversee high-risk entities within the financial sector.

The public consultation seeks feedback specifically on four draft regulatory technical standards (RTS). These RTS will form a foundational part of the new regime as the EBA works to harmonize the application of these rules throughout the EU member states.

Key Aspects of the EBA’s Consultation on AML/CFT Regulations

The four mandates being discussed in this consultation are central to the EU’s broader strategy of fighting money laundering and terrorist financing. Below are the primary points of focus:

1. Assessing Risk for Direct Supervision

The first mandate addresses how risk should be assessed to determine which institutions will be subject to direct supervision by the new European Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). The EBA proposes that the AMLA should initially determine which institutions are eligible for direct supervision, with a particular emphasis on cross-border activities. This approach aims to ensure that entities involved in complex international financial transactions, which may pose a higher risk, are subject to closer scrutiny.

2. Harmonized Methodology for Assessing Risk Profiles

Another key aspect of the proposed RTS focuses on the methodology for assessing the risk profiles of obliged entities. The EBA recommends the introduction of a harmonized methodology, which all national supervisors will be required to use when evaluating an institution’s inherent risks. This approach seeks to standardize risk assessments across the EU, allowing for a more consistent and effective approach to anti-money laundering and countering the financing of terrorism.

3. Customer Due Diligence (CDD) Requirements

Customer due diligence (CDD) is a cornerstone of anti-money laundering practices, and the EBA’s proposal for CDD requirements will give institutions flexibility while ensuring compliance with EU regulations. The proposed framework will allow institutions to choose the most appropriate approach for conducting CDD, as long as it adheres to the regulatory standards. Importantly, the EBA will not mandate specific documents or sources of information for CDD procedures, but instead provide a list of recommended options for institutions to consult. This flexibility aims to accommodate different business models while maintaining robust AML compliance.

4. Pecuniary Sanctions and Enforcement Actions

The final mandate addresses the application of pecuniary sanctions (monetary penalties) for AML/CFT breaches. The EBA’s proposal aims to ensure that AML/CFT breaches are assessed in a consistent manner by supervisors across the EU. Additionally, the enforcement actions taken in response to violations should be proportionate, dissuasive, and effective. The objective is to create a robust enforcement environment that deters non-compliance and enhances the overall effectiveness of the EU’s AML/CFT framework.

What This Means for Financial Institutions and Stakeholders

The consultation process presents a valuable opportunity for stakeholders, including financial institutions, industry associations, and compliance professionals, to voice their opinions on the proposed rules. It is crucial for institutions operating within the EU banking sector to stay informed about these developments and consider submitting their feedback before the June 6, 2025 deadline.

Feedback from the consultation will be used to refine the Regulatory Technical Standards and ensure they are both practical and effective in enhancing the EU’s fight against money laundering and terrorism financing. Financial institutions should pay particular attention to how these new rules may impact their internal procedures, compliance teams, and risk assessments.

The EBA’s Timeline and Next Steps

The consultation period for stakeholders to provide comments runs until June 6, 2025. All submitted contributions will be published at the conclusion of the consultation, and the EBA will submit its final response to the European Commission on October 31, 2025. This timeline sets the stage for the final implementation of the new rules, which will likely come into effect sometime after the submission of the EBA’s final recommendations.

For stakeholders in the financial sector, particularly those involved in AML compliance and risk management, these upcoming changes are significant. The feedback received during this consultation period will help shape the direction of the EU’s regulatory landscape in the coming years.

Conclusion: Shaping the Future of AML/CFT Regulations

As the EU continues to strengthen its anti-money laundering and countering the financing of terrorism regulations, the EBA’s public consultation provides a critical platform for stakeholder engagement. Financial institutions and industry professionals have the chance to influence the final regulatory framework by providing feedback on key aspects such as risk assessment methodologies, customer due diligence, and the enforcement of monetary penalties.

For anyone involved in compliance or regulatory matters within the EU, participating in this consultation could be a valuable opportunity to help shape the future of financial regulation and ensure that the EU’s AML/CFT regime is robust, effective, and fit for purpose.

Related Links

• European Banking Authority
• European Commission – AML/CFT Regulations
• EU’s New AML/CFT Package
• European Central Bank – Financial Stability
• Financial Action Task Force (FATF) – AML/CFT

Other FinCrime Central News Reports About Regulation Changes in Europe

• EU’s New Anti-Money Laundering Rules: What Banks Need to Know
• ESMA Sets Deadline for Digital Asset Firms to Comply with MiCA
• The Countdown to DORA AML Compliance

Source: COINGEEK