44. Institutions should also specify in their policies how they identify, assess and manage the …

Institutions should also specify in their policies how they identify, assess and manage the money laundering and terrorist financing (ML/TF) risks to which they are exposed as a result of their credit-granting activities²⁴ . In particular, institutions should:

• a. at the level of their business, identify, assess and manage the ML/TF risk associated with the type of customers they serve, the lending products they provide, the geographies to which they are exposed and the distribution channels they use;
• b. at the level of the individual relationship, identify, assess and manage the ML/TF risk associated with this relationship — as part of this, institutions should:
• i. consider the purpose of the credit;
• ii. consider the extent to which the association of a natural person or legal person that is neither the borrower nor the institution with the credit facility gives rise to ML/TF risk;
• iii. in particular, in situations in which the ML/TF risk associated with the individual relationship is established, institutions should take risk-sensitive measures to understand if the funds used to repay the credit, including cash or equivalents provided as collateral, are from legitimate sources. When considering the legitimacy of the source of funds, institutions should have regard to the activity that generated the funds and whether this information is credible and consistent with the institution’s knowledge of the customer and the customer’s professional activity.

²⁴ Directive (EU) 2015/849 requires institutions to put in place and maintain effective policies and procedures to prevent ML/TF and to detect and deter it should it occur. Institutions should also refer to the ESAs’ Joint Risk Factors Guidelines (JC 2017 37) for further information on these points.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/