Financial Crime World

Tightening Anti-Money Laundering Requirements in Svalbard and Jan Mayen

The Wolfsberg Group has released an updated Correspondent Banking Due Diligence Questionnaire (CBDDQ) for Financial Institutions (FIs) operating in Svalbard and Jan Mayen. This move aims to strengthen financial crimes compliance and mitigate the decline in correspondent banking.

Background

  • The CBDDQ is designed for FIs engaging in cross-border and/or higher-risk correspondent banking relationships.
  • It contains over 100 questions that probe into an FI’s anti-money laundering efforts and controls.

Key Features of the Revised CBDDQ

  • Populated at the Legal Entity (LE) level: Answers reflect the LE perspective but also capture information on behalf of each branch.
  • 110 questions: A significant increase from the prior version, which included 28 questions.
  • Developed by consolidating questionnaires used by Wolfsberg Group members and two KYC utilities.

Areas of Focus

The CBDDQ probes for information regarding an FI’s anti-money laundering efforts and controls, including:

Anti-Money Laundering Efforts and Controls

  • Quality assurance/compliance testing
  • Audits
  • Training and education
  • Sanctions
  • Payment transparency
  • Monitoring and reporting
  • Know Your Customer (KYC)/Customer Due Diligence (CDD)/Enhanced Due Diligence (EDD)
  • Risk assessment
  • Policies and procedures
  • Use of third parties
  • Board and management reporting

Notable Information Being Sought

  • Beneficial ownership status and public listing (as applicable)
  • Gap analysis against US and EU requirements as part of policies and procedures efforts
  • Control effectiveness evaluation of specific program components
  • Defined risk tolerance or similar risk boundaries for business
  • Automated or manual KYC/CDD/EDD processes, particularly around screening for adverse media and PEPs

Adoption of the CBDDQ

The Wolfsberg Group recommends that institutions begin using the CBDDQ with new customers and later expand to existing customers as part of periodic reviews.

Benefits of Adopting the CBDDQ

  • Reasonable and harmonized standards for correspondent banking due diligence
  • Lower costs
  • Improved financial crimes compliance
  • Reduced need to obtain additional data requirements
  • Mitigation of the decline in correspondent banking
  • Enhanced efficiencies in KYC utilities