Correspondent Banking and Wire/Electronic Transfers Requirements
As per the relevant law and directive, correspondent banking and wire/electronic transfers are subject to certain requirements to prevent money laundering and terrorism financing. This article provides a summary of these requirements.
Correspondent Banking
Establishing new correspondent relationships requires careful consideration to ensure compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The following guidelines must be followed:
- Approval from senior management: Obtain approval before establishing new correspondent relationships.
- Understanding AML/CFT responsibilities: Clearly understand and document the respective AML/CFT responsibilities of each bank.
- Payable-through accounts: Ensure that respondents have performed customer due diligence (CDD) obligations on customers with direct access to the accounts and can provide relevant CDD information upon request.
New Products and Business Practices
New products and business practices must be thoroughly assessed to identify, assess, and manage money laundering/terrorism financing risks. The following guidelines must be followed:
- Risk assessments: Conduct risk assessments before launching new products or using new technologies.
- Mitigating risks: Identify, assess, and take measures to mitigate money laundering/terrorism financing risks for new products and business practices.
Wire/Electronic Transfers
Wire/electronic transfers require accurate originator and recipient information. The following guidelines must be followed:
- Accurate information: Include accurate originator and recipient information on wire/electronic transfers.
- Required information: Ensure that the required information remains with the wire/electronic transfer throughout the payment chain.
- Non-compliance: If unable to comply, do not execute the transfer.
- Bundled transactions: For bundled transactions, include the originator’s account number or unique transaction reference number.
- Domestic transfers: Include originator information on domestic wire/electronic transfers unless available through other means.
Record Keeping and Reporting
Accurate record keeping and reporting are crucial for maintaining compliance. The following guidelines must be followed:
- Retention of records: Keep wire/electronic transfer information, including originator and beneficiary information.
- Record maintenance: Maintain records for at least five years.
- Suspicious transactions: Report suspicious transactions to the Financial Intelligence Unit (FIU).
- Cross-border transactions: Report cross-border transactions exceeding USD 10,000 or domestic transactions exceeding 100 million kyats.
- Incomplete information: Report incomplete or unavailable originator information.
Note that this summary is based on the provided text and might not cover all aspects of the relevant law and directive. For a comprehensive understanding, it’s recommended to refer to the original document.