Interaction between supervisory and AML/CFT measures
When applying supervisory measures to address prudential deficiencies related to ML/TF risk, competent authorities should engage with AML/CFT supervisors so that the underlying deficiencies/vulnerabilities are adequately addressed by the appropriate measures within the respective remit of AML/CFT supervisors and competent authorities from their respective perspectives(58).
Where competent authorities in the course of exercising their supervisory activities have reasonable indications of deficiencies in the institution’s systems and controls framework or the internal governance framework that are related to AML/CFT or reasonable grounds to suspect that the institution has increased exposure to ML/TF risks, they should:
notify the AML/CFT supervisor of these deficiencies and risks as soon as they are identified and liaise with them in line with the AML/CFT Cooperation Guidelines;
assess the impact that such deficiencies and risks may have on the prudential situation of the institution;
liaise with AML/CFT supervisors and in line with the respective authorities’ mandates and functions, consider the most appropriate prudential supervisory measures to address these deficiencies and risks in addition to any measures taken by the AML/CFT supervisors.
Where the competent authorities are notified or become aware of supervisory measures or sanctions planned or imposed by the AML/CFT supervisors, they should consider whether and how the potential prudential implications of the weaknesses and failures identified by the AML/CFT supervisors need to be mitigated.