The updated Guidelines on Risk Factors for Money Laundering and Terrorist Financing enter into force

“The European Banking Authority's (EBA) updated Guidelines on due diligence and the factors that credit and financial institutions should take into account when assessing the money laundering and terrorist financing risks associated with individual business relationships and one-off transactions enter into force on Thursday.

These Guidelines set out the factors that companies should take into account when assessing the risk of money laundering and terrorist financing related to their business and business relationships and one-off transactions and / or transactions with natural and legal persons. The guidelines also set out how companies should apply customer due diligence measures in order to reduce and manage this risk, the Bank of Lithuania announced.

The updated Guidelines will help financial market participants to implement a more effective, risk-based approach to combating money laundering and terrorist financing. They detail the requirements of the client and all activities for the assessment and due diligence of the client, the provisions related to the identification of beneficiaries. In addition, EBA has introduced new guidelines for individual sectors, such as crowdfunding platforms, payment initiation service providers, account information service providers. The updated Guidelines also provide more information on the risk factors for terrorist financing.

They also emphasize that financial market participants are not required to discontinue providing services to customers of those categories that they associate with a higher risk of money laundering and terrorist financing. Instead, financial market participants should balance the need for financial inclusion with the need to manage the relevant risks.

The amendments to these updated Guidelines aim to strengthen the European Union's (EU) anti-money laundering and anti-terrorism financing instruments by aligning the requirements with the latest changes in the EU legal framework and managing new risks in this area. The guidelines also aim to enhance the effectiveness and consistency of supervision by competent authorities.

The Lithuanian Law on the Prevention of Money Laundering and Terrorist Financing stipulates that internal control procedures must be developed taking into account the documents of the European Supervisory Authorities on risk factors and measures when simplified customer identification measures are permitted and when enhanced customer identification measures are appropriate.”

Wouldn’t it be better if the police did the fight with money laundering and terrorist financing? After all, professionals always do everything more efficiently and quickly. And would a business, instead of engaging in such a despicable bureaucracy, simply engage in business, combat business risks that are quite high and take a lot of effort?