WORLD COUNCIL ASKS FATF FOR AML/CFT CLARIFICATIONS

WASHINGTON -- The World Council of Credit Unions filed a comment letter with the Financial Action Task Force (FATF) last week, focusing on correspondent banking, information sharing and customer due diligence (CDD) requirements for the underbanked.

FATF, based in Paris, is the global standard-setting body for anti-money laundering/counter-financing of terrorism (AML/CFT) rules, and its members include the U.S. Treasury Department.

The letter covered topics World Council discussed during a meeting last month at the United Nations offices in Vienna, Austria.

Regarding correspondent banking, World Council urged FATF to work with national governments and regional bodies to ensure the task force’s guidance on correspondent banking is adopted at the national level.

FATF issued its guidance last October, with the goal of making it easier for credit unions to establish and maintain bank accounts, generally used for international payments.

The U.S. Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network issued a fact sheet last year, but the FATF standard offers “significantly increased clarity regarding supervisory expectations,” according to the World Council.

World Council also urged FATF to clarify information sharing standards regarding when unaffiliated institutions may AML/CFT-related information with other institutions and associations.

World Council members report a variety of national-level rules on AML/CFT, including the USA PATRIOT Act in the U.S. Further clarification from FATF will made it easier for institutions to determine what can be shared and with whom, for AML/CFT purposes.

Finally, World Council urged FATF to clarify its CDD guidance on when financial institutions can promote inclusion to unbanked individuals without standard identification.

World Council urged the FATF to permit institutions in all jurisdictions to open accounts for persons without standard identification using alternative means of identification such as those allowed to varying degrees in Canada, the Republic of Ireland, the United Kingdom, and the U.S.

While non-documentary methods are allowed in credit unions within the U.S., accounts not opened with a Social Security number can be flagged during examinations. This leads many credit unions to not accept those accounts.

According to World Council, it expects additional guidance sometime this year on information sharing, and potentially CDD.

 

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