According to Cointelegraph, the European Banking Authority (EBA) released new guidelines on November 14th for Payment Service Providers (PSPs) and Crypto Asset Service Providers (CASPs), clarifying that these institutions must comply with the restrictive measures of the European Union and member states when transferring funds. EBA points out that these guidelines will help financial institutions effectively implement restrictive measures within governance and risk management frameworks to avoid operational and legal risks. The EBA emphasizes that if there are loopholes in the controls, internal policies, and procedures of financial institutions, it may trigger legal and reputational risks, weaken the effectiveness of EU restrictive measures, and even have an impact on the stability of the EU financial system. The new guidelines require PSPs and CASPs to use reliable screening systems to prevent users or entities from bypassing restriction measures. These guidelines will come into effect on December 30, 2025.

These new guidelines from the EBA are a crucial step towards enhancing compliance and safeguarding the integrity of the EU financial system. By addressing potential loopholes and emphasizing robust screening systems, the EBA is not only protecting institutions but also reinforcing the broader financial ecosystem. It'll be interesting to see how PSPs and CASPs adapt to these changes before the implementation deadline in 2025.