Article 32 Requests to act in exceptional circumstances following indications of serious, repeated or systematic breaches

Financial supervisorsmeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; shall notify the Authority where the situation of any non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; with regard to its compliance with Regulation (EU) 2024/1624, Regulation (EU) 2023/1113, any other legal provisions adopted for the implementation of those Regulations or any administrative act issued by any supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; and its exposure to ML/TF risks, deteriorates rapidly and significantly, in particular where such deterioration might negatively impact several Member States or the Union as a whole or undermine the integrity of the Union’s financial system.

1. investigate such indications, which could concern breaches of Union law or, where such Union law is composed of directives or expressly grants options for Member States, breaches of national law to the extent that that national law transposes directives or exercises options granted to Member States by Union law; and

2. consider imposing sanctions on that entity in respect of such breaches in accordance with directly applicable Union law or national law transposing directives.

1. following notifications by financial supervisorsmeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; pursuant to paragraph 1;

2. as a result of the Authority’s own collection of well-substantiated information; or

3. upon receipt of information from Union institutions, bodies, offices or agencies, or from any other reliable and credible information source.

The financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned shall comply with any request addressed to it in accordance with paragraph 2 and shall inform the Authority as soon as possible, and at the latest within 10 working days of the day of the notification of such request, of the steps it has taken or intends to take to comply with that request.

Where a request referred to in paragraph 2 is not complied with or information on the steps taken or intended to be taken to comply with it is not provided to the Authority within 10 working days of the day of the notification of the request, the Authority may request the Commission to grant permission to transfer temporarily the relevant tasks and powers referred to in Article 5(2) and Article 6(1) related to direct supervision of the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; from the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned to the Authority.

1. a description of the serious, repeated or systematic breaches of the directly applicable requirements by the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; and an explanation of why such breaches fall within the scope of competence of the Authority, pursuant to paragraphs 2 and 3;

2. an explanation of why the request to the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; referred to in paragraph 2 did not result in any action being taken within the time limit set in paragraph 4, including, where relevant, the information that no reply was submitted by the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620;;

3. a proposed length of time of a maximum of three years, during which the Authority will exercise the relevant tasks and powers in relation to the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; concerned;

4. a description of the measures that the Authority intends to take in relation to the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; concerned upon the transfer of the relevant tasks and powers to address the serious, repeated or systematic breaches referred to in paragraph 2;

5. any relevant communication between the Authority and the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned.

Based on the information received pursuant to paragraph 6, the Commission shall have one month from the date of receipt of the request from the Authority to adopt a duly justified decision whether to authorise the transfer of the relevant tasks and powers or to oppose it. The decision shall be notified to the Authority, which shall immediately inform the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; and the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; thereof. The European Parliament and the Council shall be informed of the decision.

On the tenth working day after the decision authorising the transfer of tasks and powers in relation to the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; has been notified to the Authority, the non-selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, other than a selected obliged entity; shall be deemed a selected obliged entitymeans a credit institution, a financial institution, or a group of credit institutions or financial institutions at the highest level of consolidation in the Union in accordance with applicable accounting standards, which is under direct supervision by the Authority pursuant to Article 13; for the purposes of the exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23. The Commission decision shall set a time limit for the exercise of those tasks and powers, upon the expiry of which they shall be automatically transferred back to the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned.

After having consulted the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned, the Authority may submit to the Commission a request to extend the application of the decision authorising the transfer of tasks and powers. That request shall be submitted at least two months before the expiry of the initial period.

1. a description of the measures that the Authority has taken in relation to the obliged entity concerned and of the further measures it intends to take;

2. a justification as to why those remaining measures address breaches that still fall within the scope of competence of the Authority, pursuant to paragraph 2;

3. a proposed length of time of a maximum of three years for the continued exercise of the tasks referred to in Article 5(2) and the powers referred to in Article 6(1) and Articles 17 to 23 in relation to the obliged entity;

4. any relevant communication between the Authority and the financial supervisormeans the body entrusted with responsibilities aimed at ensuring compliance by obliged entities with the requirements of this Regulation, including AMLA when performing the tasks entrusted to it in Article 5(2) of Regulation (EU) 2024/1620; concerned.

The Commission shall adopt a decision whether to grant the extension within the time limit indicated in paragraph 7. Any extension granted pursuant to this paragraph may be granted only once.