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Wolfsberg News

December 24, 2017

The Wolfsberg Group wishes to provide an update with respect to its work on Correspondent Banking and the release, in October 2017, of the revised Due Diligence Questionnaire (DDQ) to the banking community.

As a result of our own conversations and feedback we have had from industry organisations, particularly in parts of the world where many banks have been "de-risked," the Group has decided that it should only publish the DDQ more widely once an additional set of materials has been completed. This is in order to limit the ability of third parties to interpret what it is that the Group intended with the DDQ and who it was directed to. These additional materials will include updated publication guidance (who this applies to, reasons for doing it, expectations for implementation); completion guidance (a question by question explanation of what each question means and how to respond to it); FAQs (questions we have already received and think are important for people to understand the answers to) and a glossary (consistent terminology so people don't interpret inappropriately/incorrectly and so FIs have the same baseline of understanding on e.g. products).

The Group has also decided to extract the 37 Standard questions (which replaced the 28 questions from the original questionnaire) from the new version and issue this as a stand-alone replacement for the existing DDQ. In so doing we are acknowledging that the original questionnaire was used far more broadly than simply for correspondent banking due diligence, however, the Group will not be issuing any recommendations as to which customer types it could be used for.

We intend to release all of these documents, along with the DDQ itself, in February 2018. In so doing, we are seeking to avoid circulation of differing interpretations that could arise should we, as the issuing Group of the DDQ, not clearly articulate what we intended, what is meant by the questions, what is desired with respect to answers, our expectations that it will take time for many organisations to reach that standard in the higher risk CB space and what we mean by the terminology employed.

Pending the release of the above, the DDQ can still be obtained by the banking community by contacting the Wolfsberg Group Secretariat at a dedicated address: ddq@wolfsberg-principles.com

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.