The Basel Committee on Banking Supervision has finalised its revisions to the annexe on correspondent banking.
These revisions are included in a new release of the guidelines on the Sound management of risks related to money laundering and financing of terrorism, which was first published in January 2014, with a first revised version issued in February 2016.
The revisions are consistent with the Financial Action Task Force (FATF) Guidance on Correspondent Banking services issued in October 2016 and serve the same objective of clarifying rules applicable to banks conducting correspondent banking activities. They form part of a broader initiative of the international community to assess and address the decline in correspondent banking coordinated by the Financial Stability Board.
The text includes proposed revisions to Annexes 2 (Correspondent banking) and 4 (General guide to account opening). The revisions guide the banks in the application of the risk-based approach to correspondent banking relationships, recognising that not all correspondent banking relationships bear the same level of risk and including an updated list of risk indicators that correspondent banks should consider in their risk assessment.
- General considerations on cross-border correspondent banking
- Risk-based approach in the context of providing correspondent banking services
- Risk indicators and risk assessment
- Assessment of the respondent bank’s AML/CFT controls
- Customer acceptance and retention
- Ongoing monitoring
- The role of banks processing cross-border wire transfer
- Group-wide and cross-border considerations
- Risk management
- Third party KYC utilities and ultimate responsibility
Read the revised paper here: http://www.bis.org/bcbs/publ/d405.pdf