June 2016 – The 4th Anti-Money Laundering Directive (AMLD) poses in its current
version a barrier to a harmonised digital single market in everyday banking,
and retail banking lobby argues that the barrier or obstacle should be tackled
at the occasion of the pending revision of the fourth AMLD which is due to the
Commission-issued Action Plan to strengthen the fight against terrorist
financing as of February 2016.
point: non-face-to-face business relationships or transactions
May last year, the 4th AMLD contains under Article 18 a regulation that leaves
the Member States with a certain flexibility in view of assessing risks through
an enhanced customer due diligence. Depending on how those risks are weighted
by each Member State, these enhanced due diligence obligations can create a de
facto barrier to cross-border sales.
policymakers so far have missed out on tailor making anti-money laundering
rules to fit within the ever-increasing digital era. According to Article 18,
applied to when assessing the risks of money laundering and terrorist
financing, EU member states and obliged entities shall take into account at
least the factors of potentially higher-risk situations set out in Annex III.
This annex contains a non-exhaustive list of various factors and evidence which
are of potentially higher risk. ESBG is at issue with the classification of
“non-face-to-face business relationships or transactions” as a high risk factor
in this annex. As banking digitization further flourishes, this requirement
would be a unwelcome obstacle for boosting cross-border sales of retail financial
services which the Commission has committed itself to. Those services would be
severely hampered when, at the same time, enhanced due diligence are necessary
in cases of non-face-to-face business relationships.
additional issue is that Member States are interpreting the wording
“non-face-to-face business relationships” differently. Some Member States
interpret this requirement in a strict way, for instance Austria, where law
stipulates residence requirements as an enhanced obligation. In Germany and
others, identification via video-camera is permitted as equivalent to
face-to-face identification, according to a March 2014 newsletter from the
German Federal Financial Supervisory Authority. This varying interpretation of
legal texts among EU member states, leading to gold-plating in some cases,
creates a particular obstacle to the Digital Single Market and prevents
boosting cross-border sales.
re-opening of the 4th AMLD provides a unique opportunity to address the
non-face-to face issue within a relatively short time to help unleash the
Digital Single Market.
European Parliament thinks it important as well. The EU representative
legislative body published recently a draft report on the Commission Green Paper on Retail Financial Services, acknowledging ESBG’s position on
AML, especially trading obstacles identified around the 4th AMLD and
parliament urges in its draft report that the Commission and the EU member
states, “…by working carefully on the implementation of the eIDAS Regulation
and the new anti-money laundering legislation, inter alia, to create – as
should be entirely feasible – a general environment in which robust security
requirements are combined with fair and simple procedures for consumers to