This joint note from the Basel Committee on Banking Supervision (BCBS), International Association of Insurance Supervisors (IAIS) and International Organization of Securities Commissions (IOSCO) provides a record of the initiatives taken by each sector to combat money laundering and the financing of terrorism. It was first prepared for the March 2003 Joint Forum meeting in Hong Kong, and thereafter submitted for the information of the Coordination Group at its March 2003 meeting in Berlin. The note is intended to be descriptive rather than prescriptive, and does not attempt to be comprehensive in its coverage of anti-money laundering/combating the financing of terrorism (AML/CFT) issues.
To the extent that institutions in each sector are offering the same services, AML/CFT measures and standards need to be reasonably consistent, otherwise there would be a tendency for criminal funds to flow to those institutions in those sectors operating under less stringent standards. However, variations in patterns of relationships between institutions and customers in each sector require AML/CFT requirements to be tailored to the circumstances of the relationship. Hence, AML/CFT standards may reasonably differ in the detail and intensity of their application.
This note is divided into two parts. The first Part provides an overview of the common AML/CFT standards that apply to all three sectors and an assessment as to whether there are serious gaps or inconsistencies in approaches and recommendations. Part 2 consists of contributions by each of the three Secretariats. This is in three sections and covers, for each sector: the relationships between the institutions and their customers focussing on the products or services that are particularly vulnerable to money laundering; how each Committee has sought to address these vulnerabilities; and, finally, a description of ongoing and future work.