Rules on combating money laundering and terrorist financing in correspondent banking clarified by the Basel Committee
7 June 2017
Banks have clearer guidance on how to best manage risks related to money laundering and the financing of terrorism under final revisions issued today by the Basel Committee on Banking Supervision. The revisions pertain to Annexes 2 ("Correspondent banking") and 4 ("General guide to account opening") of the guidelines on the Basel Committee's Sound management of risks related to money laundering and financing of terrorism.
The 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. The Committee's guidance includes a list of risk indicators that correspondent banks should consider in their risk assessment of money laundering and financing of terrorism associated with correspondent banking.
The clarifications published today are in response to growing concerns in the international community that banks are withdrawing from correspondent banking to avoid these risks. A decline in correspondent banking may, in turn, affect the ability to send and receive international payments in entire regions (see Financial Stability Board Action plan to assess and address the decline in correspondent banking).
The Basel Committee's guidance sets out concrete regulatory and supervisory expectations. The publication is fully consistent with and complements the Financial Action Task Force (FATF) standards and guidance, including the Guidance on correspondent banking services issued in October 2016.
A consultative version - Revisions to the annex on correspondent banking - was issued in November 2016. The Basel Committee wishes to thank those who expressed their views during the consultation process.