Simplification in practice: what European corporate treasurers actually need - KYC Harmonisation and EMIR Reform — Two Reforms That Would Make a Real Difference

The KYC Problem: Fragmented, Costly, and Ripe for Reform

Every corporate treasurer operating across multiple European jurisdictions knows the KYC experience all too well. Opening a new bank account, adding a new banking counterparty, or renewing an existing relationship triggers a process that is time-consuming, inconsistent, and — critically — unnecessarily duplicative. Each bank applies its own interpretation of AML/CFT requirements. Each jurisdiction has its own flavour of documentation demands. The result is that a multinational treasury team may simultaneously be managing five or six separate KYC processes with different banks across different countries, providing largely the same underlying information in entirely different formats.

The EU's AML/CFT framework exists for sound reasons. No corporate treasurer disputes its purpose. What is increasingly indefensible, however, is the failure to leverage Europe's own digital infrastructure to make compliance simpler without making it weaker. The creation of the Anti-Money Laundering Authority (AMLA) and the broader AML regulatory reform package present a genuine opportunity to establish a single EU-wide checklist of core KYC documents and verification protocols. Such a standardised baseline would immediately reduce onboarding delays and lower the administrative costs that currently fall disproportionately on treasury teams rather than on the institutions that impose the requirements.

A single EU-wide KYC standard would not weaken the AML framework. It would strengthen it — by ensuring that compliance resources are spent on genuine risk, not on bureaucratic duplication.

The more ambitious and genuinely transformative step would be the creation of a corporate AML passport: a digital KYC identity certificate, issued once, mutually recognised by EU financial institutions, and usable to onboard corporates across the single market. This is not a radical idea. The Legal Entity Identifier (LEI) already provides a universal, unique identifier for legal entities in financial transactions. An AML passport would build on this logic, extending it to the full set of KYC documentation that banks require.

The European Business Wallet (EBW), proposed by the Commission in November 2025 and now endorsed in the March European Council conclusions through the 'once-only' principle, provides a legislative vehicle for exactly this ambition. The Council's call to have the EBW agreed by co-legislators before end-2026 is encouraging. However, as currently envisaged, the EBW focuses primarily on Government-to-Business interactions. Its full potential will only be realised if it is extended to Business-to-Bank use cases, with strong incentives for financial institutions to adopt it — and if it is made interoperable with global identification standards such as the LEI to support cross-border operations beyond European borders. Without this extension, treasurers will continue to maintain parallel compliance processes for their non-EU banking relationships, limiting the practical value of the reform.

EACT POSITION ON KYC

The EACT supports a mandatory single EU KYC checklist as a minimum step, with the corporate AML passport — built on the European Business Wallet and interoperable with the LEI — as the medium-term objective. Business-to-Bank adoption must be incentivised, not left voluntary

EMIR Intragroup Reporting: A Textbook Case of Redundant Compliance

The second area where simplification would deliver immediate and measurable benefit is EMIR intragroup reporting for non-financial companies. Under the current framework, NFCs are obligated to report intragroup derivative transactions to trade repositories, even where those transactions represent purely internal risk transfers within the same corporate group.

The rationale for this obligation is, at best, unclear. Centralised corporate treasuries — which are precisely the entities managing derivatives activity for large multinationals — already report the group's aggregated external positions to trade repositories. The true market risk, which is what regulators and supervisors legitimately need to monitor, is already captured in full. Intragroup reporting adds nothing to the supervisory picture. It is, in straightforward terms, a duplicative obligation.

What makes this particularly frustrating for treasury practitioners is that the exemption process — which theoretically allows NFCs to avoid intragroup reporting — is itself complex, fragmented, and subject to national gold-plating. Applying for an exemption requires separate applications to multiple national competent authorities, each with its own procedural requirements. Many treasury teams that would qualify for the exemption do not apply, because the administrative burden of seeking it rivals the burden of the reporting obligation itself. This is precisely the kind of regulatory absurdity that simplification agendas should target first.

When applying for an exemption costs as much as complying with the obligation itself, the framework has failed. The goal of regulation is not to generate process — it is to manage risk

The cleanest solution is the removal of the intragroup reporting obligation for NFCs entirely. This would simultaneously eliminate the reporting burden and the dysfunctional exemption mechanism. The supervisory objectives of EMIR — transparency in derivatives markets, monitoring of systemic risk — would be entirely unaffected, since the externally visible risk remains reported through existing channels.

If full removal is not retained as the preferred approach, the minimum acceptable reform would be to replace the current application-based exemption process with a centralised, notification-based model. Under such a framework, an NFC would notify ESMA of its intention to use the intragroup exemption. If ESMA raises no objection within 30 days, the exemption would apply automatically. This would dramatically reduce administrative costs, remove national gold-plating, and produce a consistent outcome across the single market — without weakening supervisory oversight in any meaningful way.

EACT POSITION ON EMIR

The preferred outcome is full removal of EMIR intragroup reporting for NFCs. The acceptable fallback is a centralised, ESMA-managed, notification-based exemption with a 30-day silence procedure — replacing the current fragmented, multi-authority application process.

Conclusion: Simplification Must Be Operational, Not Rhetorical

European corporate treasurers fully support the EU's goals on AML/CFT compliance and derivatives market transparency. These objectives are legitimate and important. What is equally important, however, is that they are pursued proportionately — in ways that achieve their regulatory purpose without imposing unnecessary costs on the real economy companies that implement them. Harmonising and digitising KYC processes through an AML passport built on the European Business Wallet, and removing the EMIR intragroup reporting obligation for NFCs, would together represent a meaningful, concrete, and immediately deliverable package of simplification. They would free treasury resources for productive activity, reduce friction in cross-border operations, and demonstrate that Europe's simplification agenda is more than a political commitment — it is a practical reality.