The Financial Action Taskforce (FATF) is continuing its work around drivers for ‘de-risking’, which it says go beyond anti-money laundering and terrorist financing.
The FATF sets the global anti-money laundering and counter-terrorist financing standards.
See what the FATF said about the issue of de-risking[1] on 26 June 2015.
Correspondent banking due diligence
We expect banks will be particularly interested in the section of the FATF statement about due diligence for correspondent banking relationships:
“When establishing correspondent banking relationships, banks are required to perform normal customer due diligence on the respondent bank.
“Additionally, banks are required to gather sufficient information about the respondent bank to understand the respondent bank’s business, reputation and the quality of its supervision, including whether it has been subject to a money laundering or terrorist financing investigation or regulatory action, and to assess the respondent bank’s AML/CFT controls.
“Although there will be exceptions in high risk scenarios, the FATF Recommendations do not require banks to perform, as a matter of course, normal customer due diligence on the customers of their respondent banks when establishing and maintaining correspondent banking relationships.”
The FCA on de-risking and risk management
You can also find out our view of de-risking and risk management.