On August 19, the European Banking Authority (EBA) published its response to the European Commission’s action plan on preventing anti-money laundering (AML) and counter-terrorist financing (CTF) (the Response).

The EBA’s key recommendations set out in the Response are:

• harmonization of the EU’s legal framework to tackle the potential gaps created by diverse member state approaches when adopting EU AML and CTF law into national law — by issuing a new pan-European Regulation, which would replace and repeal the various EU AML Directives (the EU’s 5th Money Laundering Directive went into effect on January 10);

• collaboration between AML and CTF financial regulators and an EU AML and CTF supervisor to expand the knowledge and experience of the financial regulators to promote consistent outcomes throughout the EU; and

• leverage the EU’s existing AML and CTF framework in addition to the EBA’s policy, data and information technology alongside its EU and international supervisory cooperation networks.

The European Commission originally published its action plan on May 7. While the new Regulation would take effect long after the UK has formally left the EU, it is anticipated that the UK will also implement similar changes into UK law post-Brexit, as historically the UK has been tough on AML and the UK Government’s rhetoric on economic crime is such that it is expected that the UK will continue this approach.