KYC

On December 19, 2016, the Financial Stability Board (“FSB”) issued its end-of-2016 progress report regarding its action plan to assess and address the decline in correspondent banking. The report sets out a roadmap the FSB intends to follow in 2017 in response to the decline of correspondent banking, a critical part of the global payments system.  In the next year, the FSB’s action plan consists of new data analyses exploring the dimensions and implications of the issue, clarifying regulatory expectations through new guidance from the FSB’s Financial Action Task Force (“FATF”) and other standard-setting bodies, enhancing domestic risk management frameworks in jurisdictions that are home to affected respondent banks, and strengthening tools for due diligence by correspondent banks.
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Continue Reading Financial Stability Board Publishes 2017 Roadmap for Correspondent Banking

On October 5, 2016, the Office of the Comptroller of the Currency (“OCC”) issued guidance to national banks, federal savings associations, and federal branches and agencies regarding their periodic evaluation of the risks related to foreign correspondent accounts.  The guidance appears aimed to address widely reported concerns that financial institutions are unnecessarily terminating relationships with foreign correspondent banks, particularly in high-risk jurisdictions, due to regulatory threats of anti-money laundering or terrorist financing (collectively, “AML”) violations.  In particular, the guidance encourages OCC-regulated institutions to take a risk-based and individualized approach to closing foreign correspondent accounts rather than terminating entire categories of relationships.
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Continue Reading OCC Releases De-Risking Guidance for Foreign Correspondent Banking