The Clearing House (TCH) along with the IIB filed a comment letter with the BCBS on its proposed revisions to the annexes on correspondent banking and account opening in its Sound management of risks related to money laundering and financing of terrorism guidelines. The letter argues that: (i) the definition of correspondent banking used in the Revisions is overly broad and should be narrowed to encompass only activities that generate the particular AML/CFT risks the Revisions seek to address; (ii) the Committee should clarify aspects of its risk management principles, acknowledge the limitations of the risk-based approach and encourage local authorities to permit banks to comply with regulatory expectations by applying the principles in good-faith; (iii) while further development of information-sharing tools may be helpful, a more meaningful approach to reducing due diligence costs is to permit correspondents to more fully rely on the supervision of their respondents and information provided by KYC utilities; and (iv) the Revisions’ provisions regarding banks’ monitoring and reporting obligations with respect to “manifestly meaningless or incomplete fields” in payment messages must be clarified.
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