In theEuropean Union (EU), data protection laws (GDPR) and AML regulations (AMLDs) must be balancedwhen sharing customer data.
Option D (Correct):Data sharing must be"necessary, reasonable, and proportionate,"followingAML regulations and data protection requirements.
Option A (Incorrect):While data protection laws apply,AML/CFT regulations provide exemptionsfor legitimate investigations.
Option B (Incorrect):Aformal production orderis not always required if information sharing islegally permitted under AML regulations.
Option C (Incorrect):Privacy laws still apply, even in financial crime investigations. AML/CFT obligations donot override GDPRbut must be balanced appropriately.
Key Considerations in Cross-Border AML Data Sharing in the EU:
GDPR & AML Regulations Must Align:TheGeneral Data Protection Regulation (GDPR)protects customer privacy, but theEU Anti-Money Laundering Directives (AMLDs) require data sharing for AML purposes.
Proportionality Principle:Anydata shared must be strictly limited to what is necessaryfor AML purposes (e.g., transaction details but not unnecessary personal data).
Regulatory Guidance:Banks must comply withArticle 23 of GDPR, which allowsexceptions for AML compliance.
Why This Matters:
Failure toproperly balance AML compliance and data privacycan lead to:
Regulatory fines under GDPRfor data breaches.
AML penaltiesfor failing to cooperate in financial crime investigations.
[Reference:, 6th EU Anti-Money Laundering Directive (6AMLD), General Data Protection Regulation (GDPR), Article 23, EBA Guidelines on AML and Data Sharing in the EU, , , , ]
