Global Trustee and Fiduciary Services Bite-Sized Issue 6 2023

Bite-Sized | 2023 Issue 6 2 QUICK LINKS AIFMD ANTI-MONEY LAUNDERING CMU — RETAIL INVESTMENT PACKAGE CBDC COSTS & CHARGES CRYPTOASSETS ELTIF IFD/IFR LIBOR TRANSITION MIFID II/MIFIR MONEY MARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG WHISTLEBLOWING AUSTRALIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM The project findings highlighted the effectiveness of employing advanced analytics and technologies that adopt a behavioural-based analysis approach, which focuses on understanding the relationships between different individuals and businesses and identifying anomalies from normal behaviour. The results demonstrated that such methods are more effective in detecting money laundering networks than the current rules-based approach, which is limited by its siloed nature. Link to Report on Project Aurora here EBA Consults on Amendments to the Guidelines on Money Laundering and Terrorist Financing Risk Factors to Include Crypto-asset Service Providers On 31 May 2023 the European Banking Authority (EBA) launched a public consultation on amendments to its Guidelines on money laundering and terrorist financing (ML/TF) risk factors. The proposed changes extend the scope of these Guidelines to crypto-asset service providers (CASPs). The EBA states that CASPs, as well as other credit and financial institutions, are exposed to ML/TF risks. For CASPs, these risks can be increased due to, for example, the use of innovative technologies, instant transfers of crypto-assets across the world, and services that contain privacy-enhancing features. The EBA is proposing to amend its ML/TF risk factors guidelines to set common, regulatory expectations of the steps CASPs should take to identify and mitigate these risks effectively. The amendments introduce new sector-specific guidance for CASPs, which highlights factors that may indicate the CASP’s exposure to the higher or lower ML/TF risk. CASPs should consider these factors when carrying out the ML/TF risk assessments of their business and customers at the outset and during the business relationship. The Guidelines also explain how CASPs should adjust their customer due diligence (CDD) in line with those risks. Furthermore, the amendments include guidance to other credit and financial institutions on risks to consider when engaging in a business relationship with a CASP or when they are otherwise exposed to crypto-assets. Specific guidance for AML/CFT supervisors of CASPs will be delivered through the amendments to the EBA risk-based supervision Guidelines, which are under consultation until 29 June 2023. They will be further complemented with amendments to the Guidelines to prevent the abuse of fund transfers for ML/TF purposes, and new Guidelines on policies and procedures for compliance with restrictive measures. Through these products, the EBA continues its work on strengthening the EU’s AML/CFT defences. The consultation runs until 31 August 2023. Link to the Consultation here Council of the European Union Adopts Rules Which Will Make Crypto-asset Transfers Traceable On 16 May 2023 the Council of the European Union (Council) adopted updated rules on information accompanying the transfers of funds by extending the scope of the rules to transfers of crypto-assets. This ensures financial transparency on exchanges in crypto- assets and provides the EU with a solid framework that complies with the most demanding international standards on the exchange of crypto-assets, ensuring that these are not used for criminal purposes. Under the new rules, crypto-asset service providers are obliged to collect and make accessible certain information about the sender and beneficiary of the transfers of crypto-assets they operate, regardless of the amount of crypto-assets being transacted. This ensures the traceability of crypto-asset transfers in order to be able to better identify possible suspicious transactions and block them.