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Wolfsberg News

October 15, 2017

The Wolfsberg Group is pleased to announce the completion of two new significant, and related, pieces of work intended to further strengthen the international financial system. These are the new Wolfsberg Correspondent Banking Due Diligence Questionnaire (CBDDQ) and the revised Payment Transparency Standards. Both of these support the ongoing work of the Financial Stability Board's Correspondent Banking Coordination Group (CBCG), the Financial Action Task Force (FATF) and the Committee on Payments and Market Infrastructure (CPMI) with respect to Correspondent Banking and, in particular, so-called derisking. In completing this work, the Wolfsberg Group is seeking to contribute by clarifying expectations and promoting increased transparency in correspondent banking and international payment services and, over time, with adoption and acceptance across the industry, play a role in addressing the derisking problem.

The Wolfsberg Due Diligence Questionnaire


In 2002, the Wolfsberg Group first published Principles around Correspondent Banking (CB), including the articulation of a vision for international compliance standards and an international due diligence registry for Correspondent Banking. The Principles were followed in 2004 by the first Due Diligence Questionnaire (DDQ) which reflected existing industry practice at that time and has been used by many Banks as a good starting point in conducting due diligence with one another. The first DDQ was updated in 2014 but until now revisions had been relatively minor.

Today the "CBDDQ" has been comprehensively updated, recognising that regulatory expectations have increased and industry practices have evolved. After a significant amount of discussion and exchange, the Group's member Banks have settled on one due diligence standard for international correspondent banking which is being made available to KYC utilities and the wider banking community. The Group hopes this will be adopted over time across the industry, as was the first DDQ, and will constitute the standard for KYC utilities, providing benefits to all Banks, for which Correspondent Banking due diligence remains an important but complex, time consuming and costly exercise.


The Wolfsberg Payment Transparency Principles

In 2007, the Wolfsberg Group published a statement on Payment Message Standards supported by the Clearing House Association. This was an important intervention to enhance transparency in payment messages, establishing four new payment message standards to be observed by all banks and which remain relevant today. In 2016, the CPMI asked the Wolfsberg Group and the Payments Markets Practice Group (PMPG) to consider payment messages once again and to propose further industry guidance, in particular on what additional information should be included in payment messages and how any such information should be structured (Recommendation iv).

Ten years on from its original statement, the Group is publishing additional standards, which it hopes will be adopted over time across the industry and which will further increase Banks ability to process payments more safely. The standards, which, in time, the Group hopes will apply to any payment activity covered by FATF's Recommendation 16 (including new payment methods and platforms), clarifies roles and responsibilities and expectations on originators, e.g. what it means to include name, address and account number. The standards also set out expectations on intermediaries and beneficiaries, On Behalf Of payments, Money or Value Transfer Services (MVTS) and provide a view on the use of so-called Legal Entity Identifiers (LEI).

The Group also notes that some existing payments infrastructures effectively limit the amount of information that can be included in a payment message and so these standards are naturally forward looking and aspirational in nature. Full adoption will require changes to payment market infrastructures and further investments from industry participants, as was the case when the 2007 standards were issued. The Wolfsberg Group calls on providers of payment infrastructures and delivery channels to consider these standards and to work to address current limitations and co-ordinate actions through the adoption of technology and consistently structured formats. In so doing, additional system capacity will then be available to transmit the volume of information required to meet these enhanced transparency standards.

PDFWolfsberg Payment Transparency Standards 2017

Global Banks: Global Standards

The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies.

The Group came together in 2000, at the Château Wolfsberg in north-eastern Switzerland, in the company of representatives from Transparency International, including Stanley Morris, and Professor Mark Pieth of the University of Basel, to work on drafting anti-money laundering guidelines for Private Banking. The Wolfsberg Anti-Money Laundering (AML) Principles for Private Banking were subsequently published in October 2000, revised in May 2002 and again most recently in June 2012.

Since the first set of AML Principles was released, the Group has published a significant number of documents, whether in the form of Principles, Guidance, Frequently Asked Questions (FAQs) or Statements. These can all be found on this website and include, amongst many others, a Statement on the Financing of Terrorism, Anti-Money Laundering Principles for Correspondent Banking, Guidance on a Risk Based Approach for Managing Money Laundering Risks, FAQs on Politically Exposed Persons (PEPs), Trade Finance Principles, Guidance on Anti-Bribery & Corruption Compliance Programmes and a statement endorsing measures to enhance the transparency of international wire transfers to promote the effectiveness of global AML and CTF programmes.

Materials published by the Wolfsberg Group are designed to provide financial institutions (FIs) with an industry perspective on effective financial crime risk management.

There are a number of ways FIs can seek to adhere to the various documents published by the Wolfsberg Group. However, the means by which each FI choses to adopt these documents must make sense for each individual firm, recognising that one size doesn't fit all and that each FI's risk mitigation strategy must be tailored to meet its risk appetite.

The Wolfsberg Group does not advocate that FIs simply adopt each publication, but rather each FI should consider the risks described, the applicable regulatory standards and their own defined risk management strategy. The materials published by the Wolfsberg Group offer a perspective through which FIs may identify gaps or new insights and consider to what extent these gaps or insights require attention. This is a matter for each FI. For example, an FI may identify alternative controls or other compensating measures to the ones suggested, for as long as the risks in question are adequately managed. Furthermore, the risks may indeed be different in different businesses, regions or countries.

Given the dynamic nature of the issues underlying financial crime risk, the Wolfsberg Group reviews and revises its published materials from time to time. FIs should note publication changes and consider how those changes might be addressed within an FI's risk management strategy. The same applies to other interested parties which may have used, referred to or otherwise adopted any of the Wolfsberg Group's publications.

You may reach the websites of the individual member banks of the Wolfsberg Group via the links to the right.

For background information on the Wolfsberg Group and its work, you may find it useful to read the attached articles "The Wolfsberg Group" by Hans-Peter Bauer and Gemma Aiolfi and "The Private Sector becomes active: The Wolfsberg Process" by Mark Pieth and Gemma Aiolfi.

For background information on the Wolfsberg Group and its work, you may find it useful to read the attached articles "The Wolfsberg Group" by Hans-Peter Bauer and Gemma Aiolfi and "The Private Sector becomes active: The Wolfsberg Process" by Mark Pieth and Gemma Aiolfi.