High-risk jurisdictions
Which scenario reads transfers to and from the countries the institution rates higher risk, and when was that country list last refreshed?
A scenario that places here
example"High-risk jurisdiction wires > 25,000"
Channels it applies to
4 of the 20 in the dictionaryWIN REM FXC COR
International wires, remittance and money transfer, foreign exchange and correspondent accounts: one sector each on the coverage chart, hatched where no scenario reaches it.
Reference lines
held figures- BSA BSA-REC-1 names $3,000 for funds-transfer records on domestic wires, international wires, correspondent accounts and remittance and money transfer. A scenario of this typology starting above it is flagged "above the reporting threshold".
- FATF R.16 INR16.8 names USD or EUR 1,000 for the cross-border de minimis threshold a country may set on international wires and remittance and money transfer. A scenario of this typology starting above it is flagged "above the reporting threshold".
Obligations
3 regimes| Regime | Obligation |
|---|---|
| Bank Secrecy Act and its regulations (31 CFR Chapter X) | BSA BSA-AML-15 Transaction Monitoring · BSA BSA-AML-23 Section 311 Special Measures |
| FATF 40 Recommendations | FATF R.10 Customer due diligence · FATF R.19 Higher-risk countries |
| Anti-Money Laundering and Counter-Terrorism Financing Act (Australia) | AUSTRAC AMLCTF-PartA-TxnMon Transaction Monitoring · AUSTRAC AMLCTF-45 International Funds Transfer Instructions (IFTIs) - Sending · AUSTRAC AMLCTF-46 International Funds Transfer Instructions (IFTIs) - Receiving |
The obligations, quoted
BSA BSA-AML-15 Transaction MonitoringAutomated and manual transaction monitoring shall identify unusual or suspicious activity using risk-based scenarios and thresholds.
Where programmes usually fall short: No model validation; Scenarios not aligned to risk assessment
Source: Bank Secrecy Act and its regulations (31 CFR Chapter X)
BSA BSA-AML-23 Section 311 Special MeasuresInstitutions shall implement FinCEN Section 311 special measures against jurisdictions, institutions or transactions of primary money laundering concern.
Where programmes usually fall short: No process to ingest new 311 measures; Restrictions not enforced
Source: Bank Secrecy Act and its regulations (31 CFR Chapter X)
FATF R.10 Customer due diligenceFinancial institutions may not keep anonymous accounts or accounts in obviously fictitious names and must, by a principle set out in law, undertake customer due diligence when establishing a business relationship, carrying out an occasional transaction above USD or EUR 15,000 or a payment or value transfer covered by INR.16, when money laundering or terrorist financing is suspected, or when they doubt previously obtained identification data: identify and verify the customer from reliable independent sources; identify the beneficial owner and take reasonable measures to verify that identity, understanding the ownership and control structure of legal persons and arrangements; understand and where appropriate obtain information on the purpose and intended nature of the relationship; and conduct ongoing due diligence and transaction scrutiny consistent with the customer's profile including, where necessary, the source of funds. The extent of each measure follows a risk-based approach; verification takes place before or during establishment of the relationship, or as soon as reasonably practicable after it where risks are managed and business would otherwise be interrupted; an institution that cannot complete CDD does not open the account or perform the transaction, or terminates the relationship, and considers a suspicious transaction report; the requirements apply to new customers and, on materiality and risk, to existing ones. The Interpretive Note sets the risk-based approach, enhanced and simplified measures, the specific measures for legal persons, arrangements and beneficiaries of life insurance, reliance on prior verification and the timing rules.
Where programmes usually fall short: Beneficial owner identified but never verified; Ownership and control structure of corporate customers not understood
Source: FATF 40 Recommendations
FATF R.19 Higher-risk countriesFinancial institutions apply enhanced due diligence, effective and proportionate to the risk, to business relationships and transactions with natural and legal persons and financial institutions from countries for which the FATF calls for it, and countries can apply appropriate, effective and proportionate countermeasures when the FATF calls for them and independently of any such call; the Interpretive Note lists possible countermeasures, from enhanced reporting and limits on correspondent relationships to prohibiting the establishment of branches, and requires measures to advise institutions of concerns about other countries' weaknesses.
Where programmes usually fall short: FATF lists not translated into institutional controls; No ability to apply countermeasures without a FATF call
Source: FATF 40 Recommendations
AUSTRAC AMLCTF-PartA-TxnMon Transaction MonitoringSystems and controls for monitoring customer transactions for unusual or suspicious activity.
Where programmes usually fall short: No transaction monitoring
Source: Anti-Money Laundering and Counter-Terrorism Financing Act (Australia)
AUSTRAC AMLCTF-45 International Funds Transfer Instructions (IFTIs) - SendingTransfer instructions for funds of any value sent out of Australia must be reported within 10 business days.
Where programmes usually fall short: IFTIs not reported
Source: Anti-Money Laundering and Counter-Terrorism Financing Act (Australia)
AUSTRAC AMLCTF-46 International Funds Transfer Instructions (IFTIs) - ReceivingTransfer instructions for funds of any value received into Australia must be reported within 10 business days.
Where programmes usually fall short: Remittance IFTIs not reported
Source: Anti-Money Laundering and Counter-Terrorism Financing Act (Australia)