Anti-money laundering

Anti-money laundering

Wolfsberg Group Revised Correspondent Banking Due Diligence Questionnaire (2018)

The Wolfsberg Group first announced the release of the CBDDQ in 2017. However, the Group did not make the CBDDQ widely available. After initially announcing the CBDDQ, the Wolfsberg Group held back after deciding that the CBDDQ should be published more widely “once an additional set of materials has been completed . . . in order to limit the ability of third parties to interpret what it is that the Group intended with the DDQ and who it was directed to.”

Anti-Corruption

Hdeel Abdelhady to Speak on Managing Money Laundering, Trade Sanctions, and Corruption Risks

MassPoint’s Founder and Principal, Hdeel Abdelhady, will speak at a program on managing money laundering, trade sanctions, and corruption risks in business. The program, entitled “Know Your Business Partners: A Must to Managing Money Laundering, Trade Sanctions, and Corruption Risks,” will take place on November 17, 2017 in Washington, D.C. at the American Bar Association Business Law Section’s Fall 2017 Meeting.

Anti-money laundering

Wolfsberg Group Updates Correspondent Banking Due Diligence Questionnaire

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.”

Anti-Corruption

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

The logic and law enforcement value of imposing anti-financial crime obligations on financial intermediaries are clear. Nevertheless, a reassessment is now appropriate, particularly given (1) increasing legal and regulatory demands on financial intermediaries; (2) the exclusion, through “derisking,” from the financial system of small and medium businesses (SMEs), nonprofit organizations, money services businesses (MSBs), and correspondent relationship-dependent banks; and, (3) overarching questions as to whether the financial and administrative costs of compliance within the current legal framework—generally or at specific points—yield commensurate law enforcement benefits without unduly harming the legitimate interests of individuals, businesses and other financial system stakeholders.

Anti-money laundering

House Bill Would Establish National Strategy for Combating Terrorism Financing

On July 20, 2017, Representative Ted Budd (R-NC) introduced in the House of Representatives H.R. 3321, the “National Strategy for Combating Terrorist, Underground, and Other Illicit Financing Act.” The purpose of H.R. 3321 is to “require the establishment of a national strategy for combating the financing of terrorism and related financial crimes, and for other purposes.” As summarized by the House Financial Services Committee, which will meet to markup the bill on July 25, 2017, H.R. 3321 would among other measures “require the President, acting through the Treasury Secretary, to develop and publish a whole-of-government strategy to combat money laundering and terrorist financing.”

Anti-money laundering

Congressional Hearing: Managing 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.”

Anti-money laundering

Correspondent Banking and Derisking Update

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 on legislation and rule-making in respondent jurisdictions, but also on the capacity of those jurisdictions to implement and enforce stronger AML/CFT and other anti-financial crime rules.

Anti-Corruption

Sovereign Commercial Enterprises: Anti-Corruption and Confidentiality Risks

State-owned enterprises (SOEs, including sovereign wealth funds) are prominent players in international business. Given their ownership, SOEs have garnered scrutiny for their lack of transparency and heightened anti-corruption and anti-money laundering risk, as have individual SOE executives and other personnel who qualify as Politically Exposed Persons. In connection with commercial activities, SOEs are not protected in most cases by sovereign immunity. Thus, SOEs can, like their privately-owned counterparts, be subject to foreign legal processes. Given the greater scrutiny around SOEs and some of the high profile enforcement actions involving them directly or indirectly (for example, the 1MDB case), anti-corruption and other compliance, as well as good governance and risk management, are essential to avoid legal, commercial, and reputational risk and loss.

Anti-money laundering

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

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 list of risk factors that “correspondent banks should consider in their risk assessment of money laundering and financing of terrorism associated with correspondent banking.”

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