Group-wide AML/CTF compliance: new obligations for firms with overseas branches and subsidiaries?

In December 2017, the European Supervisory Authorities published a Report on draft Joint Regulatory Technical Standards (RTS) on the measures that credit and financial institutions should take to manage money laundering risk in their non-EU overseas branches and subsidiaries. The RTS focusses on the measures that EU firms must adopt when local law prevents their branches and subsidiaries sharing information with them for anti-money laundering (AML) purposes. To date, the draft RTS have received little attention, but they are potentially of significant importance to firms with branches and subsidiaries in non-EU jurisdictions with strict banking secrecy or data privacy requirements, as they may require them to adopt new monitoring strategies and arrangements. Susannah Cogman of Herbert Smith Freehills summarises the background to and requirements of the draft RTS.