1. The Authority shall perform periodic assessments of some or all of the activities of one, several, or all financial supervisors, as well as of their tools and resources. As part of each assessment, the Authority shall assess the extent to which a financial supervisor performs its tasks in accordance with Directive (EU) 2024/1640 and takes the necessary steps to ensure consistent high-level supervisory standards and practices. The assessments shall take into account the level of harmonisation of supervisory approaches and, to that end, shall include a review of the application of all or part of the AML/CFT supervisory methodology developed pursuant to Article 8, and it shall cover all financial supervisors in a single assessment cycle. The Executive Board shall adopt, after consulting the General Board in supervisory composition, an assessment cycle plan. The General Board, acting by a majority of two thirds of its members, may require the Executive Board to adopt a new plan. The length of each assessment cycle shall be determined by the Authority and shall not exceed seven years.
The Authority shall develop methods to allow for a consistent assessment of, and comparison between, the financial supervisors reviewed in the same cycle. At the end of each assessment cycle, the Authority shall submit its findings to the European Parliament and to the Council.
2. The assessments shall be carried out by the staff of the Authority and, following an open call for participation, by the staff of financial supervisors that are not subject to review, on a voluntary basis. Where relevant, the assessments shall take due account of the evaluations, assessments or reports drawn up by international organisations and intergovernmental bodies with competence in the field of ML/TF prevention. The assessments may also take due account of the information set out in the central AML/CFT database established pursuant to Article 11.
3. The Authority shall produce a report setting out the results of each assessment. A draft version of the report shall be submitted to the financial supervisor subject to the assessment for comments, prior to its consideration by the General Board in supervisory composition. Within a deadline determined by the Authority, the financial supervisor subject to the assessment shall submit comments to the draft report. The final report shall be adopted by the Executive Board, taking into account the observations of the General Board in supervisory composition. The Executive Board shall ensure consistency in the application of the assessment methodology. The report shall explain and indicate any specific follow-up measures required to be taken by the financial supervisor subject to the assessment that are deemed appropriate, proportionate and necessary as a result of the assessment. The follow-up measures may be adopted in the form of guidelines and recommendations of the General Board. The follow-up measures may also be adopted in the form of individual recommendations taken by the Executive Board. Those individual follow-up measures shall only be published upon the consent of the financial supervisor concerned and only in summary or aggregate form, such that individual financial institutions cannot be identified. The published version of the report shall not include confidential information nor references to specific financial supervisors.
4. Financial supervisors shall make every effort to comply with the specific follow-up measures addressed to them as a result of the assessment. Where applicable, financial supervisors shall provide regular updates to the Authority regarding the type of measures that they have implemented in response to the report referred to in paragraph 3.
Coordination and facilitation of the work of the AML/CFT supervisory colleges in the financial sector
1. The Authority shall ensure, within the scope of its powers and without prejudice to the powers of the relevant financial supervisors, that AML/CFT supervisory colleges in the financial sector are established and functioning consistently for non-selected obliged entities operating establishments in several Member States in accordance with Article 49 of Directive (EU) 2024/1640. To that end, the Authority may:
(a)
establish a college, where such a college has not yet been established even though the conditions for its establishment set out in Article 49 of Directive (EU) 2024/1640 are met, and convene and organise meetings of colleges;
(b)
assist in the organisation of college meetings, where requested by the relevant financial supervisors;
(c)
assist in the organisation of joint supervisory plans and joint on-site inspections or off-site investigations;
(d)
collect and share all relevant information in cooperation with the financial supervisors in order to facilitate the work of the college and make such information accessible to the authorities of the college;
(e)
promote effective and efficient supervisory activities and practices, including evaluating the risks to which non-selected obliged entities are or might be exposed;
(f)
oversee, in accordance with the tasks and powers specified in this Regulation, the tasks carried out by the financial supervisors.
2. For the purposes of paragraph 1, the staff of the Authority shall have full participation rights in the AML/CFT supervisory colleges and shall be able to participate in their activities, including on-site inspections, carried out jointly by two or more financial supervisors.
Requests to act in exceptional circumstances following indications of serious, repeated or systematic breaches
1. Financial supervisors shall notify the Authority where the situation of any non-selected obliged entity with regard to its compliance with Regulation (EU) 2024/1624, Regulation (EU) 2023/1113, any other legal provisions adopted for the implementation of those Regulations or any administrative act issued by any supervisor and its exposure to ML/TF risks, deteriorates rapidly and significantly, in particular where such deterioration might negatively impact several Member States or the Union as a whole or undermine the integrity of the Union’s financial system.
2. The Authority may, where it has indications of serious, repeated or systematic breaches by a non-selected obliged entity, request its financial supervisor to:
(a)
investigate such indications, which could concern breaches of Union law or, where such Union law is composed of directives or expressly grants options for Member States, breaches of national law to the extent that that national law transposes directives or exercises options granted to Member States by Union law; and
(b)
consider imposing sanctions on that entity in respect of such breaches in accordance with directly applicable Union law or national law transposing directives.
In that context, the Authority may, where necessary, also request the financial supervisor of a non-selected obliged entity to adopt an individual decision addressed to that entity requiring it to undertake all necessary actions to comply with its obligations under directly applicable Union law or under national law to the extent that it transposes directives or exercises options granted to Member States by Union law, including the cessation of any practice. The requests referred to in this paragraph shall not impede ongoing supervisory measures by the financial supervisor to which the request is addressed.
3. A request referred to in paragraph 2 may be initiated where the Authority has indications of a serious, repeated or systematic breach:
(a)
following notifications by financial supervisors pursuant to paragraph 1;
(b)
as a result of the Authority’s own collection of well-substantiated information; or
(c)
upon receipt of information from Union institutions, bodies, offices or agencies, or from any other reliable and credible information source.
4. The financial supervisor concerned shall comply with any request addressed to it in accordance with paragraph 2 and shall inform the Authority as soon as possible, and at the latest within 10 working days of the day of the notification of such request, of the steps it has taken or intends to take to comply with that request.
5. Where a request referred to in paragraph 2 is not complied with or information on the steps taken or intended to be taken to comply with it is not provided to the Authority within 10 working days of the day of the notification of the request, the Authority may request the Commission to grant permission to transfer temporarily the relevant tasks and powers referred to in Article 5(2) and Article 6(1) related to direct supervision of the non-selected obliged entity from the financial supervisor concerned to the Authority.
6. A request from the Authority to the Commission pursuant to paragraph 5 shall contain the following:
(a)
a description of the serious, repeated or systematic breaches of the directly applicable requirements by the non-selected obliged entity and an explanation of why such breaches fall within the scope of competence of the Authority, pursuant to paragraphs 2 and 3;
(b)
an explanation of why the request to the financial supervisor referred to in paragraph 2 did not result in any action being taken within the time limit set in paragraph 4, including, where relevant, the information that no reply was submitted by the financial supervisor;
(c)
a proposed length of time of a maximum of three years, during which the Authority will exercise the relevant tasks and powers in relation to the non-selected obliged entity concerned;
(d)
a description of the measures that the Authority intends to take in relation to the non-selected obliged entity concerned upon the transfer of the relevant tasks and powers to address the serious, repeated or systematic breaches referred to in paragraph 2;
(e)
any relevant communication between the Authority and the financial supervisor concerned.
7. Based on the information received pursuant to paragraph 6, the Commission shall have one month from the date of receipt of the request from the Authority to adopt a duly justified decision whether to authorise the transfer of the relevant tasks and powers or to oppose it. The decision shall be notified to the Authority, which shall immediately inform the financial supervisor and the non-selected obliged entity thereof. The European Parliament and the Council shall be informed of the decision.
8. On the tenth working day after the decision authorising the transfer of tasks and powers in relation to the non-selected obliged entity has been notified to the Authority, the non-selected obliged entity shall be deemed a selected obliged entity for the purposes of the exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23. The Commission decision shall set a time limit for the exercise of those tasks and powers, upon the expiry of which they shall be automatically transferred back to the financial supervisor concerned.
9. After having consulted the financial supervisor concerned, the Authority may submit to the Commission a request to extend the application of the decision authorising the transfer of tasks and powers. That request shall be submitted at least two months before the expiry of the initial period.
The request referred to in the first subparagraph shall be accompanied by the following:
(a)
a description of the measures that the Authority has taken in relation to the obliged entity concerned and of the further measures it intends to take;
(b)
a justification as to why those remaining measures address breaches that still fall within the scope of competence of the Authority, pursuant to paragraph 2;
(c)
a proposed length of time of a maximum of three years for the continued exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23 in relation to the obliged entity;
(d)
any relevant communication between the Authority and the financial supervisor concerned.
The Commission shall adopt a decision whether to grant the extension within the time limit indicated in paragraph 7. Any extension granted pursuant to this paragraph may be granted only once.
Settlement of disagreements between financial supervisors in cross-border situations
1. The Authority may assist financial supervisors in reaching an agreement in accordance with the procedure set out in paragraphs 3, 4 and 5 of this Article at the request of one or more financial supervisors pursuant to Article 46, 47, 49 or 54 of Directive (EU) 2024/1640 or in other instances where a financial supervisor disagrees with the procedure or content of an action, proposed action, or inactivity of another financial supervisor insofar as it affects its own supervisory tasks and responsibilities in relation to a specific non-selected obliged entity or multiple non-selected obliged entities.
2. In cases other than those covered by Articles 46, 47, 49 and 54 of Directive (EU) 2024/1640, a financial supervisor shall request the assistance of the Authority without undue delay where a provision of Union law requires that financial supervisor to reach, with another financial supervisor, an agreement, arrangement or other form of established or formalised cooperation relating to the supervision of specific non-selected obliged entities, and any of the following occurs:
(a)
the agreement has been reached but has not been effectively applied or adhered to by one of the parties;
(b)
a financial supervisor concludes, on the basis of objective reasons, that a disagreement exists;
(c)
two months have elapsed from the date of receipt by a financial supervisor of a request from another financial supervisor to take certain action in order to comply with the legislative acts referred to in Article 1(2) of this Regulation and the requested supervisor has not adopted a decision that satisfies the request.
3. The Executive Board shall assess any request referred to in paragraphs 1 and 2 and notify the relevant parties whether it considers the request justified and intends to act upon it in accordance with this Article.
4. The Authority shall set a time limit for conciliation between the financial supervisors, taking into account any relevant time periods specified in Union law and the complexity and urgency of the matter. For the purposes of the conciliation phase, the Authority shall act as a mediator. Where necessary or provided for in Union law, it shall issue an opinion on how to settle the disagreement.
5. Where the financial supervisors fail to reach an agreement during the conciliation phase referred to in paragraph 4, or where they fail to follow the opinion issued by Authority, the Authority may require those supervisors to take specific action or refrain from certain action, in order to settle the matter, and to ensure compliance with Union law. The decision of the Authority shall be binding on the financial supervisors. The Authority’s decision may require financial supervisors to revoke or amend a decision that they have adopted or to make use of their powers under applicable Union law.
6. The Authority shall notify the financial supervisors of the conclusion of the procedures under paragraphs 4 and 5 together with, where applicable, its decision taken under paragraph 5.
7. Any action by the financial supervisors in relation to facts which are subject to a decision pursuant to paragraph 5 shall be compatible with such a decision.
8. In the report referred to in Article 84, the Chair of the Authority shall set out the nature and type of disagreements between financial supervisors, the agreements reached and the decisions taken to settle such disagreements.
Action in cases of systematic failures of supervision
1. Where a financial supervisor has not applied measures laid down in Directive (EU) 2024/1640, or the provisions of national law transposing that Directive, or has applied measures in a way that appears to be a breach of Union law leading to systematic failures in its supervision which affect multiple obliged entities and undermine the effectiveness of the AML/CFT supervisory system, the Authority shall act in accordance with the powers set out in paragraphs 2, 3 and 4.
2. The Authority may initiate an investigation of a potential breach of Union law referred to in paragraph 1 on its own initiative where it has an indication of such a breach based on well-substantiated information collected by the Authority when carrying out its tasks pursuant to this Regulation.
The Authority may also investigate an alleged breach or non-application of Union law upon a well-substantiated request from one or more financial supervisors, the European Parliament or the Commission.
Where an investigation of a potential breach of Union law has been requested pursuant to the first or second subparagraph, the Authority shall duly inform the party making the request how it intends to proceed with the matter and whether an investigation into the alleged breach is warranted. Where the Authority decides to proceed with an investigation, it shall first inform the financial supervisor concerned.
3. The financial supervisor that is the subject of an investigation pursuant to paragraph 2 shall, without delay, provide the Authority with all information that the Authority requests for the purposes of its investigation, including as regards how the acts referred to in paragraph 1 are applied in accordance with Union law.
4. Where deemed appropriate and necessary, the Authority may also, after having informed the financial supervisor that is the subject of the investigation, provide an opportunity to all other financial supervisors to transmit information to the Authority that they deem relevant or directly address a duly justified and reasoned request for information to any other financial supervisor. The addressees of such a request shall, without undue delay, provide the Authority with clear, accurate and complete information.
5. The Authority may, no later than six months from the date of initiating its investigation, address a recommendation to the financial supervisor subject to investigation, setting out the action necessary to comply with Union law.
Before issuing such a recommendation, the Authority shall engage with the financial supervisor where it considers that such engagement is appropriate in order to resolve the systematic failures of supervision resulting in the breach of Union law, in an attempt to reach an agreement on the actions necessary for compliance with Union law.
The financial supervisor shall, within 10 working days of receipt of the recommendation, inform the Authority of the steps it has taken or intends to take to ensure compliance with Union law.
6. Where the financial supervisor has not complied with Union law within one month of the date of receipt of the Authority’s recommendation, the Commission may, after having been informed of that fact by the Authority or on its own initiative, issue a formal opinion requiring the financial supervisor to take the action necessary to comply with Union law. The Commission’s formal opinion shall take into account the Authority’s recommendation.
The Commission shall issue such a formal opinion within three months of the date of adoption of the recommendation. The Commission may extend that period by one month.
The Authority and the financial supervisor shall provide the Commission with all necessary information.
7. The financial supervisor shall, within 10 working days of receipt of the formal opinion referred to in paragraph 6, inform the Commission and the Authority of the steps it has taken or intends to take to comply with that formal opinion. When taking action in relation to issues which are the subject of a formal opinion, the financial supervisor shall comply with that formal opinion.
