Financial Crime World

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Reputation of Respondent Institution and Quality of Supervision Under Scrutiny

The reputation of a financial institution has long been linked to its ability to maintain effective anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. A recent directive issued by the regulatory body has shed light on the institution’s supervision quality, raising questions about its commitment to fighting financial crimes.

Money Laundering and Terrorist Financing Investigations

The institution has not been subject to any money laundering or terrorist financing investigations in the past five years. However, it is essential for institutions to maintain robust AML/CFT measures to prevent such occurrences from happening in the future.

Correspondent Relationships

  • The institution takes a cautious approach when establishing new correspondent relationships, ensuring that senior management approval is obtained before doing so.
  • This demonstrates its commitment to due diligence and responsible banking practices.

Anti-Money Laundering and Combating Financing of Terrorism Responsibilities

  • The institution clearly understands and documents the respective AML/CFT responsibilities of each bank in its correspondent relationships.
  • This ensures that all parties are aware of their obligations and can work together effectively to prevent financial crimes.

Payable-Through Accounts

  • When dealing with payable-through accounts, the institution is required to satisfy itself that respondents have performed customer due diligence (CDD) obligations on customers with direct access to the accounts.
  • This adds an extra layer of protection against money laundering and terrorist financing.

New Products and Business Practices

  • The institution has a robust risk assessment process in place for new products and business practices, including new delivery mechanisms and technologies.
  • This ensures that potential risks are identified and mitigated before they can cause harm.

Wire or Electronic Transfers

  • The institution is committed to transparency when it comes to wire or electronic transfers, ensuring that accurate originator and recipient information is included in all transactions.
  • This includes:
    • Full name of the originator
    • Account number
    • Address
    • Customer identification
    • Date and place of birth

Suspicious Transaction Reporting Requirement

  • The institution has a robust suspicious transaction reporting requirement in place, with reporting thresholds set for:
    • Cross-border wire or electronic transfers exceeding USD 10,000
    • Domestic wire or electronic transfers exceeding 100 million kyats
    • Transactions where the originator’s information is incomplete or unavailable
  • This demonstrates its commitment to reporting suspicious activities to the relevant authorities.

In conclusion, while the institution has not been subject to any money laundering or terrorist financing investigations, it has taken steps to ensure that its correspondent relationships are transparent and AML/CFT measures are in place. The institution’s commitment to due diligence, risk assessment, and suspicious transaction reporting is commendable, but it remains essential for institutions to continue to prioritize AML/CFT measures to maintain their reputation and avoid regulatory action.