Asylum seekers shut out of financial system by some EU banks, watchdog finds

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LONDON (Reuters) – Some European Union banks are shutting out asylum seekers and different varieties of prospects in mishandled efforts to adjust to anti-money laundering guidelines, the bloc’s banking watchdog mentioned.

Banks have grow to be way more nervous as regulators within the EU, the United States and elsewhere crack down on insufficient “know your buyer” checks, prompting some individuals to complain that they’re being unfairly locked out of the financial system.

The European Banking Authority (EBA) mentioned on Wednesday that its analysis discovered that so-called de-risking by banks and fee companies takes place throughout the EU and impacts asylum seekers and not-for-profit organisations specifically.

When de-risking, banks exclude some prospects as a result of their profile suggests potential money-laundering or terrorist financing dangers which might injury their repute.

“The EBA’s findings counsel that de-risking has a detrimental affect on the achievement of the EU’s goals, specifically in relation to preventing financial crime successfully and selling financial inclusion, competitors and stability within the single market,” the watchdog mentioned in a press release.

The EBA mentioned it has already issued steerage for nationwide regulators and banks on the way to handle cash laundering dangers correctly. It will test on what steps nationwide regulators are taking to sort out unwarranted de-risking and report again in 2023.

After a cash laundering scandal at Denmark’s Danske Bank, the European Commission set out proposals final yr to create an anti-money laundering authority together with different measures which the EBA mentioned would go some method to ending unwarranted de-risking.

But the Commission might go additional by clarifying through which conditions an account with primary options must be rejected or closed, with a grievance mechanism for patrons, the EBA mentioned.

(Reporting by Huw Jones; Editing by Alexander Smith)



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