Feedback on the Roadmap for a Money Laundering and Terrorism Financing Action Plan

11 March 2020

Consultation response

Brussels, 11/03/2020 – Finance Watch published today its feedback on the European Commission Roadmap for an Action Plan towards a new comprehensive approach to preventing and combating money laundering and terrorism financing.

In its response, Finance Watch highlights the need to assess the interaction with the 5th EU anti-money laundering directive (AMLD) and other EU regulation clearly, especially the direct overlap between the AMLD and the payment accounts directive (PAD).

Article 13 of the AMLD sets out that the identification of a client is the responsibility of the financial institution. This responsibility, and the potential liability that goes with it, is potentially a strong disincentive for the financial institution to take any risk where there are doubts over the identification process. As a consequence article 15 on “Anti-discrimination” of the PAD is at risk of not being fully implemented. Article 16.2 of the PAD anticipates the risk that credit institutions might be reluctant to open bank accounts under some circumstances and provides a clear legal basis requiring a solution.

This overlap sends a very complex message to credit institutions that they should be very cautious (as they are liable) when it comes to identification processes, together with an obligation to behave in a very inclusive manner when granting access to a payment account with basic features.

An adjustment and clarification needs to be made in the AMLD to limit the risk of back-door discrimination.