Supervision Department - AML/CFT
Training
CIP - Correspondent Banking - Monitoring
- Review periods driven by the risk rating of a
particular relationship; with high risk relationships
reviewed more frequently.
- Obtaining an updated picture for the purpose of the
account and expected activity.
- Updating screening of respondents and connected
individuals to identify individuals/entities with PEP
connections or on relevant sanctions lists.
- Involving senior management and AML staff in
reviews of respondent
relationships and
consideration of whether to maintain or exit high-
risk relationships.
- Where appropriate, using intelligence reports to
help decide whether to maintain or exit a
relationship.
- Carrying out ad-hoc reviews in light of material
changes to the risk profile of a customer.
- Copying periodic review forms year after year
without challenge from senior management.
- Failing to take account of any changes to key staff
at respondent banks.
- Carrying out annual reviews of respondent
relationships but
failing to consider money-
laundering risk adequately.
- Failing to assess new information gathered during
ongoing monitoring of a relationship.
- Failing to consider money laundering alerts
generated since the last review.
- Relying on parent banks to carry out monitoring of
respondents without understanding what monitoring
has been done or what the monitoring found.
- Failing to take action when respondents do not
provide satisfactory answers to reasonable questions
regarding activity on their account.
- Focusing too much on reputation
or business issues
when deciding whether to exit relationships with
respondents which give rise to high money-
laundering risk.
Examples of GOOD Practice
2
Examples of POOR practice
Supervision Department - AML/CFT Training
CIP - Wire Transfers
- Banks‘ core banking systems ensure that all static
data (name, address, account number) held on the
ordering customer are automatically inserted in the
correct lines of the outgoing MT103
payment
instruction and any matching MT202COV.
-
Where practical, intermediary and beneficiary
banks delay processing payments until they receive
complete and meaningful information on the
ordering customer.
- Intermediary and beneficiary banks have systems
that generate an automatic investigation every time
a MT103 appears to contain inadequate payer
information.
- Following processing, risk-based
sampling for
inward payments identifying inadequate payer
information.
- Search for phrases in payment messages such as
‗one of our clients‘ or ‗our valued customer‘ in all
the main languages which may indicate a bank or
customer trying to conceal their identity.
- Reviewing all correspondent banks‘ use of the
MT202 and MT202COV.
- Introducing the MT202COV as an additional
element of the CDD review process including
whether the local regulator expects proper use of the
new message type.
- Always sending an MT103
and matching
MT202COV wherever the sending bank has a
correspondent relationship and is not in a position to
‗self clear‘ (eg. for Euro payments within a scheme
of which the bank is a member).
- Searching relevant fields in MT202 messages for
the word ‗cover‘ to detect when the MT202COV is
not being used as it should be.
- Paying banks take insufficient steps to ensure that
all outgoing MT103s contain sufficient beneficiary
information to mitigate
the risk of customer funds
being incorrectly blocked, delayed or rejected.
-
Banks have no procedures in place to detect
incoming payments containing meaningless or
inadequate payer information, which could allow
payments in breach of sanctions to slip through
unnoticed.
- Insufficient processes to identify payments with
incomplete or meaningless payer information.
- Continuing to use the MT202 for all bank-to-bank
payments, even if
the payment is cover for an
underlying customer transaction.
Examples of GOOD Practice
2
Examples of POOR practice
Supervision Department - AML/CFT Training
CIP - Wire Transfers
- Establishing a specialist team to undertake risk-
based sampling of incoming customer payments,
with subsequent detailed analysis to identify banks
initiating cross-border
payments containing
inadequate or meaningless payer information.
- Actively engaging in dialogue with peers about the
difficult issue of taking appropriate action against
persistently offending banks.
Examples of GOOD Practice
2
Examples of POOR practice