EuReCa – A Central EU Database on AML & CFT

The European Banking Authority (EBA) launched on 31 st of January its central database for anti-money laundering and counter-terrorist financing (AML/CFT). EuReCA,  (European Reporting system for material CFT/AMLwill be central to coordinating efforts by competent authorities and the EBA to prevent and counter money laundering and terrorist financing (ML/TF) risks in the Union.

As EBA has a legal duty to contribute to preventing the use of the EU’s financial system for money laundering and terrorist financing. As such, the AML/CFT central database will be key to strengthening AML/CFT supervision and in the coordination of efforts to prevent and counter ML/TF in the EU.

Impact

EuReCA will contain information on material weaknesses in individual financial institutions in the EU that competent authorities have identified. Authorities will also be reporting the measures they have imposed on financial institutions to rectify those material weaknesses.

The EBA will use information from EuReCA to inform its view of ML/TF risks affecting the EU financial sector. It will also share information from EuReCA with competent authorities as appropriate. This process is to support other authorities at all stages of the supervisory process and, in particular, should specific ML/TF risks or trends emerge.

The idea is that EuReCA will act as an early warning tool, which will help competent authorities to act before ML/TF risk crystallise.

Background

The Legal Base for EuReCA is based on provisions in article 9a (1) and (3) of the EBA Regulation and in the draft Regulatory Technical Standards (RTS) on a central database on AML/CFT in the EU that were published on the EBA’s website on 20 December 2021. The EBA wants to share relevant information proactively on its own initiative with competent authorities in support of their supervisory activities on a risk-based approach

Summary

To ensure that the central AML/CFT database becomes an efficient tool, the quality, timeliness and completeness of the information contained therein are essential. As The submissions are made in English only and without undue delay there is an early sign that this database can fulfill its mission of the relevant authorities having the resources to use it as effectively and efficiently as possible.

More to Read

1. Regulatory Technical Standards on a central database on AML/CFT in the EU
2. Final Report on Draft RTS Under Article 9A (1) and (3) Setting Up an AML/CFT Central Database