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Financial crime has no borders. Recent high profile AML/CFT cases involving EU banks suggest that in cases where firms operate in different countries, failure by AML/CFT supervisors to communicate effectively with their EU counterparts created gaps that allowed serious compliance failures to continue for long periods of time.
The ESAs drafted these Guidelines to ensure that going forward, supervisors from different Member States have a formal cooperation framework that ensures adequate and effective AML/CFT supervision of firms that operate on a cross-border basis.
These Guidelines require that in situations where a firm operates in more than three Member States, supervisors establish an AML/CFT college. To this end, the Guidelines have laid down rules that govern the establishment and operation of the AML/CFT colleges. These colleges will bring together AML/CFT supervisors of the same firm, as well as other relevant parties, for example prudential supervisors and AML/CFT supervisors from third countries. This is to ensure that all supervisors have access to comprehensive information about the firm and use it to inform their risk assessment and supervisory approach. The colleges will also allow the supervisors to agree on a common approach, including coordinated actions.
The Guidelines also include provisions to structure supervisory cooperation in situations where the conditions for setting up an AML/CFT college are not met.