The European Banking Authority (EBA) published an opinion on Tuesday that sets out measures that financial institutions can take to comply with anti-money laundering (AML) and counter-terrorist financing requirements when providing asylum seekers from higher-risk jurisdictions with financial services.
The scale of the current migrant movement, the level of money laundering/terrorist financing risk associated with the countries that many of the refugees are coming from, and concerns about the adequacy of their documentation, “create unique challenges” for financial institutions, the EBA says in statement.
At the same time, the regulators acknowledge that “access to basic financial products and services is not only a pre-requisite for participating fully in economic and social life, it is also central to the fight against money laundering and terrorist financing. Lack of access to financial products can drive financial transactions underground, making the detection and reporting of suspicious transactions more difficult.”
The EBA opinion suggests that, in most cases, financial firms can effectively manage these risks “by offering a more limited range of services or setting up stricter internal controls, which will facilitate early intervention in the event of suspicion.”