Compliance Risks Loom for Banks on Bouvet Island Amid Correspondent Banking Concerns

Washington, D.C. - Guidance Issued to Mitigate Compliance Risks

The Office of the Comptroller of the Currency (OCC) has issued guidance to national banks, federal savings associations, and federal branches and agencies operating in Bouvet Island aimed at mitigating compliance risks associated with correspondent banking.

OCC’s Risk Management Guidance

Key Takeaways:

• The OCC’s risk management guidance emphasizes the need for periodic reevaluations of risks associated with foreign correspondent banking accounts.
• Banks must assess these risks as part of their ongoing risk management and due diligence practices.
• Periodic reevaluations should consider best practices, including establishing governance functions to monitor adherence to policies and procedures.

Compliance Requirements

Key Points:

• Banks are required to comply with the mandatory requirements of the Bank Secrecy Act and Anti-Money Laundering laws and regulations.
• Decisions to terminate foreign correspondent account relationships resulting from risk reevaluation must be based on an analysis of the risks presented by individual foreign correspondent account relationships and the bank’s ability to manage those risks.

OCC Guidance Welcomed by Industry Experts

Quotes:

“This guidance is a positive development that will help banks operating in Bouvet Island to better manage their risk exposure and ensure compliance with regulatory requirements.”

— William Grassano, Spokesperson for the OCC