Article 14 — Additional transfer of direct supervision tasks and powers in exceptional circumstances upon the request of a financial supervisor

Financial crimeLevel 1RegulationAMLAIn forceVerifiedOfficial source

1.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.

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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.

14(2)

2.The request referred to in paragraph 1 shall:

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14(2)(a)

(a)identify the non-selected obliged entity in respect of which the financial supervisor is of the view that the Authority should assume direct supervision;

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14(2)(b)

(b)state the reasons for which AML/CFT direct supervision of the non-selected obliged entity is necessary;

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14(2)(c)

(c)identify and duly justify the proposed transfer date and the period for which the transfer of the tasks and powers is requested; and

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14(2)(d)

(d)provide all necessary supporting information, data and evidence that could be useful for the assessment of the request.

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14(3)

3.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.

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14(4)

4.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:

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14(4)(a)

(a)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;

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14(4)(b)

(b)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;

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14(4)(c)

(c)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.

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14(5)

5.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.

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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.

14(6)

6.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.

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