Filenews 14 March 2022 - by TheanoThiopoulou
A call to financial institutions to ensure that they comply with the sanctions against Russia following the invasion of Ukraine and to facilitate access to basic payment accounts for refugees is the message given by the European Banking Authority.
In a post last Friday it states that "the European Banking Authority strongly condemns the recent developments that are having a heavy impact on the state, society and economy of Ukraine. Following the invasion of Ukraine, the COUNCIL of the EU adopted restrictive measures against Russia and Belarus that require action by the financial sector. EBA shall cooperate with the competent authorities to ensure the correct application of these restrictive measures by all financial institutions. In this context, the EBA will collect and filter questions on the range of restrictive measures as they apply to banks and channel them to the EU Commission, which will answer them. The EBA will continue to closely monitor and assess the situation to inform the decisions and actions needed to mitigate short- and medium-term risks and stands ready to act within its remit."
The EBA underlines the need for European banks and other financial institutions to implement and comply with the restrictive measures adopted in response to the Ukrainian crisis. Financial institutions are required to assess the adequacy and effectiveness of internal controls and governance to ensure compliance with those measures and to adapt or improve systems and procedures as appropriate.
The competent authorities shall work to ensure the adequacy of internal controls and governance in the supervised entities. Competent authorities shall also work closely with supervised institutions, financial intelligence units (FIUs) and law enforcement authorities to detect, monitor and raise awareness of fraud typologies and financial crime and to prevent circumvention of restrictive measures. This will help ensure the homogenous application of EU restrictive measures across the financial sector and maintain the proper functioning of the Single Market. The EBA strongly encourages banks and other financial institutions to carefully consider the prudential and business impact of the short- and long-term risks they face in the light of these geopolitical developments. This includes the wider impact of economic and political sanctions as well as the increased economic uncertainty and vulnerabilities resulting from the current situation. Cyber risks are a particular area that requires constant attention. In this context, banks and other financial institutions are encouraged to consider the appropriateness of their business continuity plans.
Relief measures for refugees
On 4 March 2022, The Ministers of the European Commission activated the Temporary Protection Directive (2001/55/EC)establishing temporary protection and support for persons fleeing Ukraine as a consequence of the war. National competent authorities should ensure that, in accordance with the Payment Accounts Directive (2014/92/EU), displaced persons from Ukraine have access to the opening and use of payment accounts with essential services. Financial institutions should follow a risk-based approach when providing financial products in this situation and benefit from the flexibility enshrined in EU anti-money laundering and countering the financing of terrorism (AML/CFT) legislation. The EBA Guidelines on the risk factors of money laundering and terrorist financing and the EBA opinion on customer due diligence for asylum seekers should help financial institutions.
