Follow-up: EBA Guidelines on the Implementation of EU and National Sanctions Measures

A few days ago, we informed you on our #rethinkcompliance blog about the contents and implementation requirements of EBA/GL/2024/14 and EBA/GL/2024/15 (https://www.msg-compliance.de/en/blog/eba-leitlinien-umsetzung-sanktionsmassnahmen).

Upon further review of the European Banking Authority (EBA) website, it becomes evident that BaFin has declared “Does not comply/does not intend to comply” in response to both guidelines. This places Germany among the few European countries that have opted not to fully implement the EBA guidelines.

Positive seems that BaFin refers to the "disproportionate administrative burden" that EBA/GL/2024/15 would entail regarding the review of domestic transfers – without any added value – as part of its reasoning.

In its justification, BaFin particularly points to:

• existing national legal requirements in the German Banking Act (KWG), in particular Section 25a, and the Foreign Trade and Payments Act (AWG)
• the responsibility of the Deutsche Bundesbank for monitoring compliance with restrictive measures
• and the close cooperation between the Deutsche Bundesbank and BaFin.

Further details can be found here (EBA site): Guidelines on internal policies, procedures and controls to ensure the implementation of restrictive measures by the Union and the Member States | European Banking Authority

It remains debatable whether the current national framework – including AWG, KWG, Bundesbank guidelines on financial sanctions, and BaFin's interpretation and application guidance (AuA AT and BT) – fully meets the expectations set by the EBA guidelines.

German financial institutions with international operations – and therefore potentially subject to supervision in other EU countries – must carefully examine the EBA Guidelines on the implementation of EU and national sanctions measures.

Even for institutions operating solely within Germany, it is advisable to proactively address the contents of both guidelines in light of the upcoming EU Anti-Money Laundering Regulation, in order to identify and close potential compliance gaps in good time.