On 21 December 2023, the EBA published a Consultation Paper (CP) on 2 draft Guidelines (GLs) on internal policies, procedures and controls to ensure the implementation of EU and national restrictive measures. The draft EBA GLs create a common understanding, among entities like payment service providers (PSPs), crypto-asset service providers (CASPs) and their supervisors, of the steps needed to comply with restrictive measures (EU restrictive measures adopted by the EU under Art. 29 TEU or Art. 215 TFEU and national restrictive measures adopted by Member States in compliance with their national legal order). Restrictive measures are binding on any person or entity under the jurisdiction of Member States and comprise individual measures (targeted financial sanctions) and sectoral measures (financial and economic measures or embargoes). The first set of draft EBA GLs is addressed to financial institutions (FIs) subject to supervision and regulation under, among others, the PSD2 and EMD2 and prudential supervisors and sets common, regulatory expectations with regard to the role of senior management, internal governance and risk management in the context of restrictive measures. The second set of draft EBA GLs is addressed to PSPs and CASPs and sets out the steps needed to comply with restrictive measures when they are performing transfers of funds and crypto-assets as defined in the TFR and it especially focuses on Know Your Customer (KYC), screening and due diligence. The deadline for comments is 24 March 2024. The consultation form can be found here. A virtual public hearing will be held by the EBA on 8 February 2024 from 10h to 12h CET (deadline for registration via this link is by 31 January 2024 at 18h CET).
