OCC Bulletin 2009-36| December 17, 2009
Bank Secrecy Act/Anti-Money Laundering: Cover Payments Guidance
Chief Executive Officers and Compliance Officers of All National Banks, Department and Division Heads, All Examining Personnel, and Other Interested Parties
The guidance attached to this bulletin continues to apply to federal savings associations.
The Office of the Comptroller of the Currency (OCC) and the U.S. federal banking supervisors, in consultation with Office of Foreign Assets Control and Financial Crimes Enforcement Network, have issued interagency guidance entitled “Transparency and Compliance for U.S. Banking Organizations Conducting Cross-Border Funds Transfers.” The interagency guidance references the paper issued by the Basel Committee on Banking Supervision in May 2009, entitled Due diligence and transparency regarding cover payment messages related to cross-border wire transfers (www.bis.org). The OCC, as a member of the Basel Committee on Banking Supervision, has endorsed this paper.
The paper discusses the risks inherent in cover payment arrangements in which an originator’s bank does not send full transaction information to an intermediary bank (cover intermediary) consequently leaving the cover intermediary unable to filter or monitor transactions effectively. The lack of transparency can impair the cover intermediary’s risk management and compliance with the law, particularly for cross-border transactions. The paper does not create new obligations for any institutions beyond what is required by applicable law and regulation of their jurisdictions.
The interagency guidance clarifies the U.S. federal banking supervisors’ perspectives on certain points in the Basel Committee paper, including the expectations for sanctions screening and transaction monitoring by intermediary banks. The interagency guidance also discusses the banking supervisors’ approach to reviewing institutions’ risk management practices with respect to cross-border funds transfers.
For further information, please contact your examiner-in-charge, OCC supervisory office, or the OCC Compliance Policy Department at (202) 649-5740.
Ann F. Jaedicke
Deputy Comptroller for Compliance Policy