On 31 January 2019, the European Commission issued a final version of its draft Delegated Regulation under the Fourth Anti-Money Laundering Directive (EU) 2015/849 (4AMLD) dealing with Regulatory Technical Standards (RTS) on cross border money laundering and terrorist financing risks.
Specifically, the RTS provides for the minimum action and type of additional measures that EU credit and financial institutions are required to identify to assess and manage the money laundering and terrorist financing risks to which they are exposed, in particular, when they have established branches or majority-owned subsidiaries in third countries or where they are considering whether to establish branches or majority-owned subsidiaries in third countries. 4AMLD sets standards for the effective assessment and management of money laundering and terrorist financing risk at group level – this RTS seeks to lay down rules when certain third countries inhibit the ability of the institution to adopt such policies on a group basis.
Compliance departments at EU credit and financial institutions should take into account the guidance and determine whether they should seek independent legal advice to determine the impact of AML/CFT legal impediments they face when operating in third countries.
The draft Commission Delegated Regulation can be found here.