A recent effort by the Financial Action Task Force to improve cross-border payment transparency is commendable, but there are additional steps the task force should take to reduce operational challenges and preserve a true risk-based approach, the American Bankers Association said today.
FATF is an intergovernmental body that issues recommendations for international standards to combat money laundering and the financing of terrorism. The task force has announced revised recommendations for standards concerning cross-border payments and other value transfers. The recommendations will likely affect the Financial Crimes Enforcement Network’s travel rule.
In a letter, ABA said further work was needed on the recommendations. Among other things, the association urged FATF to adopt a phased implementation for the recommendations, to ensure beneficiary alignment checks are not mandatory for every covered transaction, to be more explicit that verification of originator information is generally satisfied through existing customer identification requirements, to mindful of privacy and data security risks from requiring more information, such as date of birth, to travel with a greater range of payments, and to ensure banks regulatory requirements are clear.
