Basel Committee Finalizes AML/CFT Risk Management Guidance

Anti-Money Laundering Basel Risk Management Combating the Financing of Terrorism

On January 15, the Basel Committee on Banking Supervision issued final guidance regarding anti-money laundering/combating the financing of terrorism (AML/CFT) risk management. The Committee states that the guidelines are consistent with and supplement the 2012 International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued by the Financial Action Task Force.  The guidelines supersede two previously-issued Basel Committee publications: Customer due diligence for banks (October 2001) and Consolidated KYC management (October 2004). The final guidelines detail the “essential elements” of sound AML/CFT risk management, including those related to (i) assessing and understanding risks; (ii) customer acceptance policies; (iii) customer and beneficial owner identification; (v) ongoing monitoring; (vi) information management and record keeping; and (vii) reporting suspicious transactions and asset freezing. The guidelines also address AML/CTF in the group-wide and cross-border context, and outlines expectations for banking supervisors.