FINANCIAL CRIMES AND CORRESPONDENT BANKING

On 10th May, White & Case published an article saying that correspondent banking relationships are once again in the news.  As regulators and correspondent banks increase their scrutiny of these relationships and, in the case of correspondent banks, demand more and more rigorous controls, respondent banks face the threat of account terminations and de-risking by their correspondent banks.  It argues that it is time for the banks affected to re-examine the sufficiency of their own anti-financial crime controls to ensure continued access to major financial centres.  The firm says that the article is intended to help respondent banks understand the regulatory, supervisory, and enforcement pressures on correspondent banks and provide an overview of how to best manage correspondent banking relationships.  AML/CFT practitioners have long recognised the risks posed by correspondent bank accounts, and these are highlighted in the USA PATRIOT Act.  US authorities expect correspondent banks to manage their risks wherever they lie, and therefore they need to analyse both general and customer-/transaction-specific risks.  It concludes that, at a minimum, establishing and maintaining a solid anti-financial crime programme is a foundation element for a respondent bank seeking to establish a long-lasting partnership in a correspondent banking relationship.

https://www.whitecase.com/sites/default/files/2019-05/correspondent-risk-financial-crimes-and-correspondent-banking.pdf

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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