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EU banks must give Ukrainian refugees access to bank accounts: regulator

European banks can apply lighter anti-money laundering checks on Ukrainian refugees to ensure they can open basic bank accounts, the EU’s banking regulator said Wednesday.

Banks and supervisors should ensure that refugees can access the EU’s financial system without having to zealously comply with anti-money laundering rules, the European Banking Authority said in a statement.

“Following the invasion of Ukraine, millions of people have found refuge in EU Member States,” the regulator said. “They need access to basic financial products and services to participate in EU society. The EBA calls on financial institutions to provide such access.”

For instance, banks don’t have to require a passport to open an account with basic features and can rely on other documentation to prove that a prospective customer is a Ukrainian refugee, the Paris-based authority said.

Banks can also postpone some customer checks until a later date to allow refugees to use prepaid cards and instead up their monitoring or set limitations such as restrictions on person-to-person money transfers to counteract the risks.

Still, the EBA warned, lenders should be alert to signs of exploitation or human trafficking, such as “unreasonably” low transfers for wages or strange patterns of payments.

The EU regulator also warned banks to be on their guard for signs that customers are attempting to “obfuscate” relationships with people hit by Russian sanctions, or to conceal the true owner of a business as they seek to comply with the EU’s sanctions regime.

Before Russia invaded Ukraine, the EBA had already warned banks over dropping “risky” clients like diamond dealers and asylum seekers in the name of anti-money laundering compliance.

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