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

The Guidelines are available here and the related BCBS is here.

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• Nonfinancial Risk For Banks: Incorporating Environmental, Social and Governance (ESG) to Identify and Manage Banks’ Legal, Commercial and Reputation Risk, April 2017.

• Senate Bill to Combat ISIS Targets “Jurisdictions of Terrorism Financing Concern,” March 2017.

• Trump’s Foreign Policy May Further Strain Foreign Correspondent Banking (Derisking), January 2017.

• Do U.S. Banking Regulators Like the NYDFS Have Authority to Enforce OFAC Sanctions?, July 2016.

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