The Wolfsberg Correspondent Banking
Due Diligence Questionnaire 2017
October 15, 2017
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 on one another. The first DDQ was updated in 2014 but, until now, revisions had been relatively minor.
The Wolfsberg Group had long noted the need to revise the first DDQ recognising, however, that this would be a long and difficult task. The impetus to move ahead with a comprehensive review and update came from the publication of the CPMI's Consultation Report on Correspondent Banking issued in 2015. The first Recommendation of this Report focussed on the use of KYC Utilities in Correspondent Banking Due Diligence noting, "Relevant stakeholders (e.g. The Wolfsberg Group) may review the templates and procedures used by the different utilities and identify the most appropriate data fields to compile a data set that all utilities should collect as best practise and that all Banks have to be ready to provide to Banks which require the information."
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 CBDDQ comprises a comprehensive set of questions which Wolfsberg Group member banks, and most of its respondents, were familiar with as these were already being used as part of the respondent bank due diligence process. Now, however, these questions have been refined and formulated in a consistent way, as well as being better structured to cover all main aspects required to conduct effective correspondent banking due diligence. As such, the CBDDQ goes much further than either of the previous (2004 or 2014) versions which were adopted and utilised very much as a "minimum" question set. Instead the CBDDQ constitutes a "reasonable and enhanced" question set likely to be satisfactory in most situations, barring very exceptional cases.
As a result, the Wolfsberg Group expects this CBDDQ question set, when completed, to satisfy FATF's Recommendation 13, that for "cross border correspondent banking" additional due diligence requirements must be undertaken, including for so called "high risk" correspondent banks.
The Wolfsberg Group members have committed to being early adopters of the CBDDQ and will support implementation with FAQ's and additional awareness raising materials, as well as conducting outreach to promote the CBDDQ as "the standard" for correspondent banking due diligence across the industry and foster its adoption by KYC utilities.
An important additional stakeholder group for correspondent banking due diligence is the public sector, including policy makers, supervisors and regulators. The development of the CBDDQ has been undertaken with regular updates being provided to key stakeholder groups in the public sector and the Wolfsberg Group is planning on continuing progress updates after publication.
How to obtain the CBDDQ?
The CBDDQ can be obtained by the banking community by contacting the Wolfsberg Group Secretariat at a dedicated address: email@example.com