Here are a few key takeaways from our submission:

• Strong call for a risk-based approach
  EPIF urges the EBA to preserve flexibility by ensuring that AML requirements are applied based on demonstrated risk levels and actual transaction behaviour, rather than a one-size-fits-all model across low-, medium-, and high-risk categories.
• Support for digital identity and innovation
  EPIF calls for harmonisation of eIDAS data across the EU, and the promotion of API-based and digital-first onboarding solutions – stressing that non-face-to-face onboarding should not be automatically deemed riskier.
• Clarification needed on key definitions and procedures
  EPIF raises concerns about ambiguities around definitions and requirements for proof of place of birth or beneficial ownership, especially in jurisdictions lacking central registries or standardized documents.
• Concerns over proportionality in customer due diligence
  EPIF highlights the need to calibrate document requirements according to risk levels. Applying the same stringent rules to low-risk clients could hinder efficiency and innovation without improving AML controls. This also applies to low-value e-money products: clear, risk-based rules set by Level 1 legislation should not be constrained by overly prescriptive RTS criteria.
• Recommendations on sanctions and supervisory measures
  Before imposing pecuniary penalties, EPIF recommends that authorities allow entities time to submit an action plan and show remediation progress.

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Both consumers and retailers greatly benefit from the current e-money exemption under the 5th AML Directive which should thus be maintained in the AMLR.

In particular, we recommend co-legislators to:

➔ Support the e-money exemption in Article 15 (3) per the EP’s proposed text
➔ Remove the restriction to „a single Member State“
➔ Remove the reference to a “direct commercial agreement with a professional issuer”
➔ Support Article 22 (1) (c) in the EP’s proposed text

The full Joint Call for Action can be found below.

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The Head of the EPIF Secretariat, Nickolas Reinhardt, stated that “The proposal to remove the exemption is not necessary and disproportionate. There is a very low risk of such products being misused for illicit purposes. The regulatory regime governing the issuance of these products is already very strict and issuers comply with various statutory requirements. Today’s spending and loading limits are extremely low, with a limit of 50 euros for online transactions and 150 euros for offline transactions, and the issuers of such products carry out sophisticated measures to prevent any misuse.”

The full statement can be found below.

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The retention of such exemption can be incorporated in EU Regulation in a compliant way and following a risk-based approach, without being in conflict with EU legislation and the FATF requirements.

You can read the full Joint Statement in the document below.

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EPIF considers this to be an important exemption, which is to the great benefit of consumers and that plays an important role in order to maintain the attractiveness of these products.

The signatories of this position paper firmly advise and call on the co legislators to retain the exemption for low risk, low value e money products in the AML Regulation for the benefit of customers , proportionate data collection , financial inclusion and to support digitisation and innovative business models.

The post EPIF co-signs Industry One Pager on CDD Exemption for low-risk E-Money Products appeared first on Payment Institutions.

EPIF very much welcomes the Guidelines but points out that further clarity should be provided. The use of plain language throughout the Guidelines would help regulators and businesses understand what is expected.

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