While certainly not a new issue, the identification of correspondent banking as a heightened anti-money laundering (AML) risk factor has recently been partially addressed by the Wolfsberg Correspondent Banking Due Diligence Questionnaire (CBDDQ).
The CBDDQ addresses correspondent risk by addressing the following correspondent controls:
- ENTITY & OWNERSHIP
- PRODUCTS & SERVICES
- AML & SANCTIONS PROGRAMMES
- ANTI-BRIBERY & CORRUPTION PROGRAM
- POLICIES & PROCEDURES
- AML & SANCTIONS RISK ASSESSMENTS
- KYC, CDD & EDD
- MONITORING & REPORTING
- PAYMENT TRANSPARENCY
- SANCTIONS
- TRAINING & EDUCATION
- COMPLIANCE TESTING & QUALITY ASSURANCE
One of the keys to successfully mitigating correspondent risk is the synchronization of the above controls throughout operations, and ensuring that accurate, timely information flows through business units and compliance functions.
To learn more about applying effective, efficient operations to improve your compliance program, reach out to our Financial Crimes & Investigations team:
- Mike Carter, mcarter@alvarezandmarsal.com
- Larry Iwanski, liwanski@alvarezandmarsal.com
- Hal Crawford, hcrawford@alvarezandmarsal.com
European and American investigators and financial intelligence units are supplying some of the world’s largest banks with data on risks posed by correspondent accounts as part of a new forum aimed at tackling fraud and money laundering. Launched in December, the Europol Financial Intelligence Public Private Partnership, or EFIPPP, involves investigators, regulators and officials from financial intelligence units in seven European nations and the United States, as well as senior compliance officers at 14 global lenders, including Standard Chartered and HSBC. The group has identified a “dilution” of know-your-customer processes tied to correspondent banking as a key risk after criminal investigations in the European Union found that financial institutions often lack insight into the parties behind certain suspicious transactions, Frederic Pierson, head of Europol’s criminal assets bureau, told ACAMS moneylaundering.com.
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