Source: OJ L, 2024/1620, 19.6.2024Current language: EN
- Anti-money laundering
Basic legislative acts
- Anti-money laundering authority regulation (AMLAR)
Article 14 Additional transfer of direct supervision tasks and powers in exceptional circumstances upon the request of a financial supervisor
Summary What does Article 14 of the Anti-money laundering authority regulation (AMLAR) say?
This article establishes an exceptional mechanism that complements the standard selection process set out in Article 13, by allowing a financial supervisor to request that the Authority take over direct supervision of a non-selected obliged entity.
It is deliberately narrow in scope: the request can only be made in exceptional circumstances, such as where supervisory measures have proven ineffective against serious or repeated breaches, where problems span a group of entities, or where the national supervisor has a temporary and demonstrable lack of capacity.
The article sets out the formal requirements for making such a request, the conditions the Authority must verify before accepting it, and what happens at the end of the supervision period, namely an automatic transfer of tasks and powers back to the financial supervisor.
Important points:
- Financial supervisors are required to submit a structured and evidenced request, including a supervisory history report and risk profile of the entity concerned, before the Authority will consider assuming direct supervision.
- The Authority only accepts the transfer of direct supervision if at least one of three specific conditions is met, relating to ineffective national measures, group-wide risks, or a temporary lack of national supervisory capacity.
- Once accepted, the non-selected obliged entity is treated as a selected obliged entity for the duration of the supervision, after which tasks and powers automatically revert to the financial supervisor unless an extension is requested.
Springlex's summary of the article, a reading aid, not a substitute for the legal text.
A financial supervisor may submit a reasoned request to the Authority for the Authority to assume direct supervision and carry out the tasks listed in Article 5(2) with respect to a particular non-selected obliged entity.
The request referred to in the first subparagraph shall only be submitted in exceptional circumstances with the aim of addressing at Union level a heightened ML/TF risk or compliance failures at a non-selected obliged entity and to ensure a consistent application of high supervisory standards.
The request referred to in paragraph 1 shall:
identify the non-selected obliged entity in respect of which the financial supervisor is of the view that the Authority should assume direct supervision;
state the reasons for which AML/CFT direct supervision of the non-selected obliged entity is necessary;
identify and duly justify the proposed transfer date and the period for which the transfer of the tasks and powers is requested; and
provide all necessary supporting information, data and evidence that could be useful for the assessment of the request.
The financial supervisor’s request shall be accompanied by a report indicating the supervisory history and risk profile of the non-selected obliged entity concerned. The non-selected obliged entity shall be informed of the request and the timeline proposed therein.
The Authority shall assess the request referred to in paragraph 1 within two months, or within a timeframe that allows the transfer of tasks and powers by the date proposed in the request, whichever is longer. The Authority shall only agree to the requested transfer of direct supervision where at least one of the following conditions is met:
the requesting supervisor can demonstrate the inefficacy of supervisory measures imposed on the non-selected obliged entity in relation to serious, repeated or systematic breaches of applicable requirements;
the heightened ML/TF risk or the serious, repeated or systematic breaches of applicable requirements affect several entities within a non-selected obliged entity group, and the relevant financial supervisors agree that coordinated supervisory action at Union level would be more effective to address them;
the request concerns a temporary, objective and demonstrable lack of capacity at the level of the financial supervisor to adequately and timely address the ML/TF risk of a non-selected obliged entity.
Where the Executive Board of the Authority finds that the conditions set out in paragraphs 1, 2 and 4 have been fulfilled, it shall adopt a decision addressed to the requesting financial supervisor and to the non-selected obliged entity concerned notifying them of the acceptance of the request. The decision shall specify the date on which the Authority is to assume direct supervision and the duration of such supervision. As of the date on which the Authority is to assume direct supervision, the non-selected obliged entity concerned shall be deemed a selected obliged entity for the purposes of this Regulation.
Upon the end of the duration of the direct supervision by the Authority, set out in the decision referred to in the first subparagraph, the tasks and powers related to the direct supervision of the obliged entity concerned shall automatically be transferred back to the financial supervisor, unless the Authority extends the application of that decision following a corresponding request made by the financial supervisor in accordance with paragraphs 1 to 4.
Where the Executive Board of the Authority refuses the financial supervisor’s request, it shall provide the reasons thereof in writing, clearly indicating which conditions laid down in paragraphs 1, 2 and 4 have not been met. The Authority shall consult the financial supervisor prior to taking a decision and shall ensure that the non-selected obliged entity is informed of the outcome of the process.
Springlex and this text is meant purely as a documentation tool and has no legal effect. No liability is assumed for its content. The authentic version of this act is the one published in the Official Journal of the European Union.
Definition
crypto-asset services
Definition
supervisor
Definition
financial mixed activity holding company
Definition
non-selected obliged entity
Definition
crypto-asset service provider
Definition
credit institution
- a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013;
- a branch of a credit institution, as defined in Article 4(1), point (17), of Regulation (EU) No 575/2013, when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
parent undertaking
- for groups whose head office is located in the Union, an obliged entity that is a parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU that is not itself a subsidiary of another undertaking in the Union, provided that at least one subsidiary undertaking is an obliged entity;
- for groups whose head office is located outside of the Union, where at least two subsidiary undertakings are obliged entities established in the Union, an undertaking within that group established in the Union that:
- is an obliged entity;
- is an undertaking that is not a subsidiary of another undertaking that is an obliged entity established in the Union;
- has a sufficient prominence within the group and a sufficient understanding of the operations of the group that are subject to the requirements of this Regulation; and
- is given the responsibility of implementing group-wide requirements under Chapter II, Section 2 of this Regulation;
Definition
selected obliged entity
Definition
crypto-asset
Definition
property
Definition
group
Definition
financial institution
- an undertaking other than a credit institution or an investment firm, which carries out one or more of the activities listed in points (2) to (12), (14) and (15) of Annex I to Directive 2013/36/EU of the European Parliament and of the Council(32), including the activities of currency exchange offices (bureaux de change), but excluding the activities referred to in point (8) of Annex I to Directive (EU) 2015/2366, or an undertaking the principal activity of which is to acquire holdings, including a financial holding company, a mixed financial holding company and a financial mixed activity holding company;
- an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council(33), insofar as it carries out life or other investment-related assurance activities covered by that Directive, including insurance holding companies and mixed-activity insurance holding companies as defined, respectively, in Article 212(1), points (f) and (g), of Directive 2009/138/EC;
- an insurance intermediary as defined in Article 2(1), point (3), of Directive (EU) 2016/97 where it acts with respect to life insurance and other investment-related insurance services, with the exception of an insurance intermediary that does not collect premiums or amounts intended for the customer and which acts under the responsibility of one or more insurance undertakings or intermediaries for the products which concern them respectively;
- an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU of the European Parliament and of the Council(34);
- a collective investment undertaking, in particular:
- an undertaking for collective investment in transferable securities (UCITS) as defined in Article 1(2) of Directive 2009/65/EC and its management company as defined in Article 2(1), point (b), of that Directive or an investment company authorised in accordance with that Directive and which has not designated a management company, that makes available for purchase units of UCITS in the Union;
- an alternative investment fund as defined in Article 4(1), point (a), of Directive 2011/61/EU and its alternative investment fund manager as defined in Article 4(1), point (b), of that Directive that fall within the scope set out in Article 2 of that Directive;
- a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council(35);
- a creditor as defined in Article 4, point (2), of Directive 2014/17/EU of the European Parliament and of the Council(36) and in Article 3, point (b), of Directive 2008/48/EC of the European Parliament and of the Council(37);
- a credit intermediary as defined in Article 4, point (5), of Directive 2014/17/EU and in Article 3, point (f), of Directive 2008/48/EC, when holding the funds as defined in Article 4, point (25), of Directive (EU) 2015/2366 in connection with the credit agreement, with the exception of the credit intermediary carrying out activities under the responsibility of one or more creditors or credit intermediaries;
- a crypto-asset service provider;
- a branch of a financial institution referred to in points (a) to (i), when located in the Union, whether its head office is located in a Member State or in a third country;
Definition
third country
Definition
funds