Regulators around the world are stepping up anti-money-laundering (AML) efforts, and, as a result, lenders are tightening the screws on cross-border payments, according to Corporate Treasurer.
For example, Standard Chartered Bank in Hong Kong told customers in December that for any cross-border payment to be processed, bank customers will have to report the name, account number and full address of both the payee and recipient. The bank said the new requirement was to meet AML recommendations from the Financial Action Task Force.
Meanwhile, even more AML and counterterrorism directives are making their way through the legislative pipeline for the European Union.
According to a December briefing by U.K. law firm LK Shields, the new EU requirements will eliminate some exemptions that have allowed simplified customer due diligence when dealing with specified customers and products. The new rules will also extend the required scrutiny for “politically exposed persons” — individuals with high government positions, who are thus more at risk for corruption — to include persons entrusted with a prominent function by an international organization, as well as their family members and close associates.
New EU rules will also include an increased range of sanctions that may be imposed on individuals (not just banks) for breaches of AML and CTF obligations; increased use of ownership registries to simplify identification of beneficial ownership of companies and trusts; and introduction of risk assessments at EU and national levels.