Proposals clarify rules on combating money laundering and terrorist financing in correspondent banking
23 November 2016
Banks will have clearer guidance on how to best manage risks related to money laundering and the financing of terrorism under proposals issued today by the Basel Committee on Banking Supervision.
The draft revisions aim to ensure that banks conduct correspondent banking business with the best possible understanding of the applicable rules on anti-money laundering and countering the financing of terrorism.
They reflect growing concerns in the international community about banks avoiding these risks by withdrawing from correspondent banking, which may, in turn, affect the ability to send and receive international payments in entire regions.1
"The proposed revisions develop the application of the risk-based approach for correspondent banking relationships, recognising that not all correspondent banking relationships bear the same level of risk," the report says.
The proposals follow the publication by the Financial Action Task Force (FATF) of its Guidance on correspondent banking services in October 2016. The Committee seeks to clarify the expectations of banking supervisors, consistent with the FATF standards and guidance.
The text includes proposed revisions to Annexes 2 ("Correspondent banking") and 4 ("General guide to account opening") of the guidelines on the Sound management of risks related to money laundering and financing of terrorism.
Comments should be uploaded here by Wednesday 22 February 2017 or sent by post to: Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland. All comments will be published on the BIS website unless a respondent requests confidential treatment.
1 See Financial Stability Board, Progress report to G20 on the FSB action plan to assess and address the decline in correspondent banking, 25 August 2016.