We have submitted our consultation reply to the AMLA draft on Regulatory Technical Standards for assessing and classifying AML/CFT risks in the non-financial sector.
Our overall review is that the proposals need greater proportionality and simplification, particularly for resource-constrained small- and medium-sized practices
Some of our key points:
🔹 A more appropriate definition of small entities: EFAA proposes alignment with the EU small entity definition for financial reporting purposes, or a turnover threshold of EUR 2 million and 10 FTE employees reflecting the definition of an EU micro entity..
🔹 “Collect once” data: supervisors should make use of information already available in public records and held by PAOs before requesting data directly from firms.
🔹 Longer risk assessment cycles for reassessments of underlying risk profiles which do not materially change. EFAA proposes a three-year cycle, potentially extending to five years for low-risk entities.
🔹 Professional judgement matters: residual risk assessments should not rely solely on formulaic approaches and should recognise effective controls and adherence to professional and ethical requirements.
Read our full reply here.