The Financial Action Task Force (FATF) yesterday issued an updated Guidance, entitled Correspondent Banking Services. This 18-page white paper appears to respond, in depth, to
the current concerns regarding the appropriate use of a risk-based analysis in a correspondent banking situation.
The subjects covered are:
FATF action to address de-risking in the correspondent banking context.
The purpose of this Guidance, the target audience, and the status of this Guidance.
Due Diligence on the respondent institution.
Verifying respondent institutions' information, and assessing/documenting higher risks.
Ongoing Due Diligence on the respondent institution.
Ongoing transaction monitoring.
Ongoing monitoring and the interplay with specific Recommendations.
Ongoing monitoring and request for information about transactions.
Clear terms governing the correspondent banking relationship.
Ongoing communication and dialogue.
Adjusting the mitigation measures to the evolution of risks.
Additional guidance for financial institutions which have Money or Value Transfer Services (MVTS) customers.
Readers who wish to review the complete text can access it here.