Guidelines on Sound management of risks related to money laundering and financing of terrorism
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.”
- Congressional Hearing on Terrorism Finance Probes Bank Secrecy Act Data Processing Effectiveness, Lack of Beneficial Ownership Transparency, and Potential BSA and Patriot Act Amendments, April 2017.
- Nonfinancial Risk For Banks: Incorporating Environmental, Social and Governance (ESG) to Identify and Manage Banks’ Legal, Commercial and Reputation Risk, April 2017.