Wolfsberg Group Updates Correspondent Banking Due Diligence Questionnaire

Wolfsberg Group Correspondent Banking Due Diligence Questionnaire 2017 The Wolfsberg Group, a group of thirteen global banks, on October 15, 2017 announced its issuance of a "comprehensively" updated Correspondent Banking Due Diligence Questionnaire (the "CBDDQ"). The CBDDQ responds to FATF Recommendation 13 on Correspondent Banking and is the international correspondent banking standard on which the Wolfsberg Group members have "settled", "committed to being early adopters of," and plan to support "with FAQ's and additional awareness raising materials." The Wolfsberg Group is making the CBDDQ available to the "banking community;" requests for the CBDDQ should be directed to the Wolfsberg Group Secretariat by email to ddq@wolfsberg-principles.com. *** Key excerpts from the Wolfsberg Group statement on the… Read More Continue Reading

OFAC DIRECTIVE 1 AS AMENDED SEPTEMBER 29, 2017

Business Update | October 11, 2017 | Author: Hdeel Abdelhady | PDF OFAC Further Tightens Russia Debt Prohibitions Pursuant to the Countering Russian Influence in Europe and Eurasia Act of 2017 As required by the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA),[i] the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on September 29, 2017 amended and reissued OFAC Directive 1 (Directive 1).[ii] As amended, Directive 1 continues to prohibit certain “new” debt, equity, and related transactions involving entities subject to U.S. Sectoral Sanctions targeting Russia’s financial services sector. This Business Update discusses the background to and mechanics of Directive 1 as amended and reissued. Ukraine/Russia-Related… Read More

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Banks, Credit Unions and Other Financial Insitutions as Deputized Law Enforcement

From Anti-Money Laundering to Immigration Enforcement: Time to Reassess the Law Enforcement Role of Banks, Credit Unions and Other Financial Intermediaries.  “Credit unions are deeply committed to the fight against crime, but it is important to recognize we are not law enforcement agents and we have certain fundamental limitations.” This statement, made by the Senior Vice President and General Counsel of a major U.S. credit union in testimony before Congress in July 2017,[1] reflects the legal and regulatory requirements and expectations that banks, credit unions, money services businesses, and other financial intermediaries can, must, and should play a role in combatting the misuse of the financial system for illicit purposes.… Read More

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Hdeel Abdelhady Discussed the NYDFS Habib Bank Enforcement Action

MassPoint’s Founder and Principal, Hdeel Abdelhady, discussed the legal significance and potential commercial implications of the NYDFS’ enforcement action against Habib Bank at a time of correspondent banking derisking. Ms. Abdelhady stated that: “at any time, the loss a New York banking license and direct access to the U.S. financial system would be devastating, but the potential implications of the lost license may be greater now given that U.S. banks have steadily exited or limited foreign correspondent relationships in recent years, leaving foreign banks cut off from or with limited or costly access to the U.S. dollar and financial system.” Read Ms. Abdelhady’s full comments here in this comprehensive piece, by… Read More

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Congressional Hearing: Managing Terrorism Financing Risk in Remittances and Money Transfers

Congressional Subcommittee to Hold Hearing on Terrorism Financing Risk in Remittances and Money Transfers  The U.S. House of Representatives Financial Services Committee (the “FSC“) Terrorism and Illicit Finance Subcommittee will on July 18, 2017 hold a hearing entitled “Managing Terrorism Financing Risk in Remittances and Money Transfers.”  The FSC memorandum to all of its members states that the “hearing will explore the terrorist and illicit financing risks that are inherent in any form of asset transfer whether through formal banking channels, MSBs, other legitimate remittance networks, or through informal and unregulated value-transfer systems.”  Concerns about the terrorism financing risks posed by non-bank facilitated money transfers have been constant since 9/11. The FSC’s memorandum describing… Read More

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Correspondent Banking and Derisking Update

Financial Stability Board Publishes Action Plan to Address Decline in Correspondent Banking/Derisking Correspondent Banking Update |  July 4, 2017  | Author: Hdeel Abdelhady Ahead of the upcoming G20 meeting, the Financial Stability Board (FSB) published today, July 4, 2017, a progress report on efforts to address the withdrawal of correspondent banking relationships (derisking) and its action plan to assess and address derisking. Among the areas of concern and action items identified by the FSB are remittances and building the capacity of affected respondent bank jurisdictions to effectively identify and counter money laundering, terrorism finance, and other illicit financial activities. Importantly, the FSB has stated that its efforts will focus not just… Read More

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Maryland Banking Regulation: Commercial Bank Directors State Residency

Commercial banks in Maryland will soon have an added degree of latitude in selecting their directors. On April 18, 2017, Governor Hogan approved Maryland Senate Bill 206, Financial Institutions – Qualifications of Directors of Commercial Banks – Residency (the “Amendment”). The Amendment, which repeals and reenacts, with amendments, Section 3-403 of the Maryland Code, Financial Institutions Article, provides that “[a]t least 30% of the directors of a commercial bank shall be residents of this State.” The Amendment, which takes effect on October 1, 2017, will decrease, as of its effective date, the percentage of commercial bank directors that must be residents of Maryland. Current law requires that a “majority” of commercial bank directors be… Read More

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Basel Committee Clarifies Guidance on Countering Money Laundering and Terrorism Financing in Correspondent Banking

Guidelines on Sound management of risks related to money laundering and financing of terrorism Snapshot Update June 7, 2017 Today the Bank for International Settlements' Basel Committee on Banking Supervision (BCBS) issued "Guidelines on Sound management of risks related to money laundering and financing of terrorism" (the "Guidelines"). The Guidelines were issued "to describe how banks should include money laundering (ML) and financing of terrorism (FT) risks within their overall risk management." With respect to foreign correspondent banking, the Guidelines' clarifications are designed to respond to the withdrawal of correspondent banking relationships (derisking) that have adversely affected banks and, in some cases, entire regions. Accordingly, Annex 2 of the Guidelines includes a… Read More Continue Reading

Congressional Hearing on Terrorism Financing Probes Bank Secrecy Act Data Effectiveness, Potential BSA Amendments

Congressional Hearing on Terrorism Finance Probes Bank Secrecy Act Data Processing Effectiveness, Lack of Beneficial Ownership Transparency, and Potential BSA and Patriot Act Amendments Business Update |  April 28, 2017 | Author: Hdeel Abdelhady | Download Full Update On April 27, 2017, I attended a Congressional hearing on “Safeguarding the Financial System from Terrorist Financing,” held by the House Committee on Financial Services’ Subcommittee on Terrorism and Illicit Finance (the “Subcommittee”). The sole witness was Mr. Jamal El-Hindi, Acting Director of the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury charged with protecting the financial system from money laundering, terrorism financing and other illicit activities.… Read More Continue Reading