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EU financial institutions would have to give their senior anti-money laundering staff direct, meaningful access to their boards of directors and regularly ensure they have enough resources to do their jobs under new guidelines pitched by the European Banking Authority.

In a 47-page call for feedback, EBA officials wrote Monday that the guidelines would help tackle differences—and shortcomings—in how the EU’s 27 nations go about ensuring that AML departments wield some measure of influence within the top echelons of their respective institutions as mandated by the bloc’s Fourth AML Directive.

Four separate reviews conducted since the directive took effect in 2017 have found that several nations have yet to implement the requirement, which at times has given some boards a free hand to underfund their compliance departments and disregard the risk of illicit finance that certain clients and products present.

Such failings have led to disastrous consequences, most notably in the case of Danske Bank, where a lack of oversight by senior managers in Copenhagen allowed thousands of opaque offshore entities to move hundreds of billions of euros through the lender’s Estonian affiliate virtually undisturbed from 2007 to 2015.

The new guidance aims to prevent such a scandal from reoccurring by directing banks, money services businesses and other financial institutions to appoint senior compliance officers who can, on their own initiative, directly petition their boards for “all necessary or appropriate measures to ensure … compliance and effectiveness.”

The guidance provides financial institutions more granular requirements based on 4AMLD while making clear that supervisors should test compliance with them in their examinations.

At least once a year, the appointed compliance officer would have to give his or her directors a detailed “activity report” that includes a recent financial-crime risk assessment, the number of payments that the institution’s monitoring systems flagged as potentially illicit, the number of suspicious activity reports that the institution filed, and a wide range of other data points.

Boards would also receive frequent updates on business lines that carry a higher risk of financial crime, review the “the most relevant or significant communications and engagements” with regulators and financial intelligence units, and annually assess whether their AML compliance functions have the necessary technical and human resources.

If they have not done so already, financial institutions that operate across borders as part of a multinational group should appoint a compliance executive at their parent company to ensure AML compliance across their entire enterprise, according to the EBA.

The EBA proposed the new guidelines two weeks after the European Commission, the EU’s executive branch, published a comprehensive plan to strengthen the bloc’s AML defenses and ultimately replace the agency with a new AML regulator within the next five years.

Whether financial institutions will implement the EBA’s guidance after certain EU nations ignored key aspects of 4AMLD, a mandatory package of AML reforms, is another matter altogether.

Holger Pauco-Dirscherl, an AML consultant in Frankfurt, told ACAMS moneylaundering.com in an email that the guidelines could serve as a stopgap until the bloc’s broader, mandatory AML plan comes into force, and until then help banks in Germany and other countries that have yet to issue guidelines of their own.

“I think it is a mix of ‘Hallelujah, finally some guidance,’ and ‘What the hell? Where will I get further resources to comply?” he said.

Financial institutions, national AML supervisors and other interested parties have until Nov. 2 to share their views on the proposal.

Contact Koos Couvée at kcouvee@acams.org