Complying with Greek Anti-Money Laundering Regulations: A Comprehensive Guide

Table of Contents

1. Introduction to Greek Anti-Money Laundering Regulations
2. Overview of the Greek AML Framework
3. Key Regulatory Bodies and Their Roles
4. Core Requirements for AML Compliance in Greece
5. Customer Due Diligence (CDD) Measures
6. Reporting Suspicious Transactions
7. Record-Keeping and Documentation
8. Risk Assessment and Management
9. Training and Awareness Programs
10. Compliance Monitoring and Auditing
11. Penalties and Enforcement Actions
12. Recent Developments and Future Outlook
13. Conclusion
14. FAQs

1. Introduction to Greek Anti-Money Laundering Regulations

Greece, as a member of the European Union and a key player in the global financial system, has implemented robust anti-money laundering (AML) regulations to combat financial crimes and protect the integrity of its economy. These regulations are designed to prevent, detect, and report illicit financial activities, ensuring that the Greek financial system remains resilient against money laundering and terrorist financing threats.

In this comprehensive guide, we will explore the intricacies of Greek AML regulations, providing valuable insights for financial institutions, businesses, and professionals operating within the Greek jurisdiction. Understanding and complying with these regulations is crucial not only for legal compliance but also for maintaining the trust and reputation of your organization in the global financial landscape.

2. Overview of the Greek AML Framework

The Greek AML framework is built upon a foundation of national laws, European Union directives, and international standards. The primary legislation governing AML efforts in Greece is Law 4557/2018, which transposes the EU’s 4th Anti-Money Laundering Directive (AMLD4) into national law. This law has been subsequently amended to incorporate provisions from the 5th Anti-Money Laundering Directive (AMLD5) and other relevant EU regulations.

The Greek AML framework aims to:

• Prevent the use of the financial system for money laundering and terrorist financing
• Enhance transparency in financial transactions
• Strengthen cooperation between national and international authorities
• Implement risk-based approaches to AML compliance
• Establish clear responsibilities for obliged entities

3. Key Regulatory Bodies and Their Roles

Several regulatory bodies play crucial roles in enforcing and overseeing AML compliance in Greece. Understanding their functions is essential for effective compliance:

3.1 Bank of Greece

The Bank of Greece is the central bank and primary supervisor for credit institutions, payment institutions, and e-money institutions. It is responsible for:

• Issuing AML/CFT guidelines for supervised entities
• Conducting on-site and off-site inspections
• Imposing administrative sanctions for non-compliance

3.2 Hellenic Capital Market Commission (HCMC)

The HCMC oversees capital market participants, including investment firms, mutual fund management companies, and portfolio investment companies. Its AML-related responsibilities include:

• Supervising AML compliance in the securities sector
• Issuing circulars and guidelines on AML matters
• Investigating potential violations and enforcing penalties

3.3 Financial Intelligence Unit (FIU)

The Greek FIU, officially known as the Anti-Money Laundering, Counter-Terrorist Financing and Source of Funds Investigation Authority, is responsible for:

• Receiving, analyzing, and disseminating suspicious transaction reports (STRs)
• Cooperating with domestic and international authorities
• Providing guidance on AML/CFT matters to reporting entities

4. Core Requirements for AML Compliance in Greece

To comply with Greek AML regulations, obliged entities must implement a comprehensive AML program that includes the following core components:

4.1 Risk-Based Approach

Entities must adopt a risk-based approach to AML compliance, which involves:

• Conducting regular risk assessments of their business activities, products, and customers
• Allocating resources and implementing controls commensurate with identified risks
• Regularly reviewing and updating risk assessment methodologies

4.2 Internal Policies and Procedures

Organizations must establish and maintain documented AML policies and procedures that cover:

• Customer due diligence measures
• Transaction monitoring and reporting
• Record-keeping requirements
• Employee training programs
• Internal control and audit mechanisms

4.3 Appointment of a Compliance Officer

Obliged entities must designate a qualified individual as the AML Compliance Officer, responsible for:

• Overseeing the implementation of AML policies and procedures
• Serving as a point of contact for regulatory authorities
• Ensuring timely reporting of suspicious transactions

5. Customer Due Diligence (CDD) Measures

Customer Due Diligence is a cornerstone of effective AML compliance. Greek regulations require obliged entities to implement robust CDD measures, including:

5.1 Customer Identification and Verification

Entities must identify and verify the identity of their customers using reliable, independent source documents, data, or information. This includes:

• Obtaining and verifying basic identification information (e.g., name, address, date of birth)
• Verifying the authenticity of identification documents
• Establishing the purpose and intended nature of the business relationship

5.2 Beneficial Ownership Identification

Obliged entities must identify and verify the beneficial owners of legal entities and arrangements. This involves:

• Understanding the ownership and control structure of corporate customers
• Identifying individuals who ultimately own or control more than 25% of a legal entity
• Verifying the identity of beneficial owners using reliable sources

5.3 Enhanced Due Diligence (EDD)

In higher-risk situations, such as dealing with politically exposed persons (PEPs) or high-risk countries, entities must apply enhanced due diligence measures, including:

• Obtaining additional information on the customer and beneficial owner
• Conducting more frequent and thorough transaction monitoring
• Obtaining senior management approval for establishing or continuing the business relationship

6. Reporting Suspicious Transactions

Greek AML regulations require obliged entities to report suspicious transactions to the Financial Intelligence Unit promptly. Key aspects of suspicious transaction reporting include:

6.1 Identifying Suspicious Activities

Entities must implement systems and controls to detect potentially suspicious transactions, such as:

• Unusual transaction patterns or volumes
• Transactions inconsistent with the customer’s profile
• Complex or opaque ownership structures
• Transactions involving high-risk jurisdictions

6.2 Internal Reporting Procedures

Organizations should establish clear internal procedures for employees to report suspicious activities to the AML Compliance Officer, including:

• Providing a secure and confidential reporting channel
• Ensuring prompt escalation of potential suspicious activities
• Maintaining records of internal reports and decisions

6.3 Filing Suspicious Transaction Reports (STRs)

The AML Compliance Officer must assess internal reports and file STRs with the FIU when there are reasonable grounds to suspect money laundering or terrorist financing. This process involves:

• Gathering all relevant information about the suspicious activity
• Completing the prescribed STR form accurately and comprehensively
• Submitting the STR to the FIU within the required timeframe

7. Record-Keeping and Documentation

Maintaining comprehensive records is crucial for AML compliance and regulatory examinations. Greek regulations require obliged entities to keep records for at least five years after the end of the business relationship or occasional transaction. Key record-keeping requirements include:

7.1 Customer Information

Entities must maintain records of:

• Customer identification and verification documents
• Beneficial ownership information
• Results of CDD and EDD measures
• Account files and business correspondence

7.2 Transaction Records

Detailed records of all transactions must be kept, including:

• Transaction amounts and currencies
• Transaction dates and parties involved
• Supporting documentation (e.g., invoices, contracts)

7.3 Internal Reports and Decisions

Records should be maintained for:

• Internal suspicious activity reports
• Decisions not to file STRs and the reasoning behind them
• AML risk assessments and mitigation measures

8. Risk Assessment and Management

Implementing a robust risk assessment and management framework is essential for effective AML compliance in Greece. This involves:

8.1 Conducting Enterprise-Wide Risk Assessments

Organizations should regularly assess their overall AML risk exposure, considering factors such as:

• Customer types and geographical locations
• Products and services offered
• Distribution channels and technologies used
• Emerging threats and vulnerabilities

8.2 Customer Risk Profiling

Entities must develop and implement a methodology for assigning risk ratings to customers, taking into account:

• Customer type (e.g., individual, corporate, trust)
• Industry or occupation
• Source of funds and wealth
• Geographical factors
• Transaction patterns and volumes

8.3 Ongoing Monitoring and Review

Risk assessment and management should be an ongoing process, involving:

• Regular reviews of customer risk profiles
• Updating risk assessment methodologies as needed
• Adjusting controls and mitigation measures based on evolving risks

9. Training and Awareness Programs

Ensuring that employees are well-trained and aware of AML obligations is crucial for effective compliance. Greek regulations require obliged entities to implement comprehensive training programs that cover:

9.1 Initial Training

New employees should receive AML training as part of their onboarding process, covering:

• Overview of AML regulations and obligations
• The organization’s AML policies and procedures
• Customer due diligence requirements
• Identifying and reporting suspicious activities

9.2 Ongoing Training

Regular refresher training should be provided to all relevant employees, addressing:

• Updates to AML regulations and internal policies
• Emerging money laundering trends and typologies
• Case studies and practical examples
• Role-specific AML responsibilities

9.3 Specialized Training

Additional, targeted training should be provided to employees in high-risk roles or departments, such as:

• Compliance officers and AML specialists
• Front-line staff involved in customer onboarding
• Senior management and board members

10. Compliance Monitoring and Auditing

To ensure ongoing compliance with Greek AML regulations, organizations must implement robust monitoring and auditing processes:

10.1 Internal Controls

Entities should establish internal control mechanisms to monitor compliance with AML policies and procedures, including:

• Regular compliance checks and spot-checks
• Automated transaction monitoring systems
• Periodic reviews of CDD documentation and risk assessments

10.2 Independent Audits

Organizations should conduct regular independent audits of their AML programs, which may involve:

• Engaging external auditors with AML expertise
• Reviewing the effectiveness of AML policies, procedures, and controls
• Testing the organization’s compliance with regulatory requirements

10.3 Reporting and Remediation

The results of monitoring and auditing activities should be reported to senior management and the board of directors. Any identified deficiencies should be addressed through:

• Developing and implementing corrective action plans
• Updating policies and procedures as needed
• Providing additional training to address knowledge gaps

11. Penalties and Enforcement Actions

Non-compliance with Greek AML regulations can result in severe penalties and enforcement actions. The regulatory authorities have the power to impose a range of sanctions, including:

11.1 Administrative Fines

Monetary penalties can be substantial, with fines ranging from thousands to millions of euros, depending on the severity and duration of the violation. Factors considered in determining fines include:

• The nature and gravity of the infringement
• The degree of responsibility of the natural or legal person
• The financial strength of the entity
• Any previous violations

11.2 Regulatory Actions

In addition to fines, regulatory authorities may impose other measures, such as:

• Issuing public reprimands or warnings
• Imposing temporary or permanent bans on individuals from holding management positions
• Suspending or revoking licenses or authorizations
• Requiring the implementation of specific remedial measures

11.3 Criminal Prosecution

In cases of serious violations or willful non-compliance, individuals and entities may face criminal prosecution, which can result in:

• Imprisonment for individuals involved in money laundering activities
• Confiscation of assets derived from criminal activities
• Significant reputational damage to the organization

12. Recent Developments and Future Outlook

The Greek AML regulatory landscape continues to evolve in response to emerging threats and international standards. Recent developments and future trends include:

12.1 Implementation of AMLD6

Greece is in the process of transposing the EU’s 6th Anti-Money Laundering Directive (AMLD6) into national law. Key changes include:

• Expansion of the list of predicate offenses for money laundering
• Enhanced cooperation between EU member states in prosecuting money laundering offenses
• Stricter penalties for legal persons involved in money laundering activities

12.2 Focus on Beneficial Ownership Transparency

There is an increased emphasis on improving the transparency of beneficial ownership information, including:

• Implementation of the Central Beneficial Ownership Registry
• Enhanced due diligence requirements for complex ownership structures
• Improved information sharing between competent authorities

12.3 Adoption of New Technologies

The use of advanced technologies in AML compliance is expected to grow, with a focus on:

• Artificial intelligence and machine learning for transaction monitoring and risk assessment
• Blockchain and distributed ledger technologies for enhancing transparency
• RegTech solutions for streamlining compliance processes

13. Conclusion

Complying with Greek Anti-Money Laundering regulations is a complex and ongoing process that requires dedication, resources, and expertise. By implementing a comprehensive AML program that addresses customer due diligence, risk assessment, transaction monitoring, reporting, and training, organizations can effectively mitigate their AML risks and contribute to the integrity of the Greek financial system.

As the regulatory landscape continues to evolve, it is crucial for obliged entities to stay informed about new requirements and emerging best practices. By maintaining a proactive approach to AML compliance, organizations can not only avoid penalties and reputational damage but also build trust with customers, partners, and regulators in an increasingly complex financial environment.

14. FAQs

Q1: What are the main regulatory bodies responsible for AML oversight in Greece?

A1: The main regulatory bodies responsible for AML oversight in Greece are the Bank of Greece, the Hellenic Capital Market Commission (HCMC), and the Financial Intelligence Unit (FIU). Each of these bodies has specific responsibilities and jurisdictions within the Greek financial system.

Q2: How often should organizations conduct AML risk assessments?

A2: While there is no specific regulatory requirement for the frequency of risk assessments, it is generally recommended that organizations conduct comprehensive AML risk assessments at least annually. However, risk assessments should also be performed whenever there are significant changes in the business, such as entering new markets or launching new products.

Q3: What are the record-keeping requirements for AML compliance in Greece?

A3: Greek AML regulations require obliged entities to maintain records of customer information, transactions, and internal reports for at least five years after the end of the business relationship or occasional transaction. These records must be readily accessible to competent authorities upon request.

Q4: Are there specific requirements for dealing with Politically Exposed Persons (PEPs) in Greece?

A4: Yes, Greek AML regulations require enhanced due diligence measures for Politically Exposed Persons. This includes obtaining senior management approval for establishing or continuing business relationships with PEPs, taking adequate measures to establish the source of wealth and funds, and conducting enhanced ongoing monitoring of the business relationship.

Q5: What are the potential consequences of non-compliance with Greek AML regulations?

A5: Non-compliance with Greek AML regulations can result in severe consequences, including substantial administrative fines, regulatory actions such as license suspension or revocation, public reprimands, and in serious cases, criminal prosecution. The specific penalties depend on the nature and severity of the violation, as well as the entity’s compliance history and cooperation with authorities.

Article reviewed by Liina Tamm, Real Estate and Investment Expert | Consultant for Commercial and Residential Properties | Market Analysis and Strategies for International Investors, on March 2, 2025