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Financial Services Law Insights and Observations

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  • BAFT Announces 2017 Global Payments Symposium; Will Highlight Advances in Payments Innovation, Blockchain, and Artificial Intelligence

    Fintech

    On July 19 and 20, the Bankers Association for Finance and Trade (BAFT) will host its 2017 Global Payments Symposium in New York City. The symposium will help bankers and payments professionals understand the latest innovation trends affecting compliance, payments, blockchain, fintech, cybercrime, and artificial intelligence, among others. BAFT will also discuss methods to integrate innovations into the business lines and how global challenges and best practices impact the U.S.

    Fintech BAFT Blockchain Privacy/Cyber Risk & Data Security Payments Distributed Ledger

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  • International Trade Organizations Release “Trade Finance Principles”; Quarterly Analysis of Global Financial Market

    Financial Crimes

    On January 24, the Banking Commission of the International Chamber of Commerce (“ICC”) and the Bankers Association for Finance and Trade (“BAFT”) jointly announced the publication of The Wolfsberg Group, ICC and BAFT Trade Finance Principles (“Trade Finance Principles”),  a replacement to the 2011 Wolfsberg Group Trade Finance Principles paper, which now addresses “due diligence required by global and regional financial institutions of all sizes in the financing of international trade.”  The Trade Finance Principles outline the standard for controlling the risks of financial crime, including but not limited to “tax evasion, fraud, human trafficking, bribery and corruption, terrorist financing, the financing of proliferation of weapons of mass destruction, and other related threats to the integrity of the international financial system.” In addition, the Trade Finance Principles require the management processes undertaken by financial institutions to “address the risks of financial crime associated with Trade Finance activities.”

    Separately, on March 6, the Bank for International Settlements released its Quarterly Review—an analysis that examines current global financial market trends and the uncertainty regarding potential fiscal and monetary policy changes in the changing political environment.

    Financial Crimes BAFT Bank for International Settlements International

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  • BAFT Issues Comments on Proposed AML/CFT Guidance Revisions

    Financial Crimes

    On February 22, the Bankers Association for Finance and Trade (BAFT), an international financial services association for organizations engaged in international transaction banking, together with the Institute of International Finance (IIF) issued a letter to the Basel Committee on Banking Supervision (BCBS) with comments on BCBS’ proposed revisions to its risk management guidance related to anti-money laundering and counter-terrorism financing. In the letter, BAFT and IFF note that, while both associations are “particularly pleased with [BCBS’] recognition that not all correspondent banking relationships bear the same level of risk and [BCBS’] acknowledgment of the difference between inherent and residual risk,” they do summarize several areas where enhancements would assist with the “general usefulness” of the final guidance:

    • BCBS should “design guidance that explicitly permits a correspondent bank to rely upon appropriate utilities for the vast majority of cases rather than simply permitting a correspondent bank to use a utility as another source of information supporting the due diligence process” with the purpose of “establishing international standards or sound practices for such utilities to create greater assurance of achieving official ALM/CFT goals.”
    • BCBS should adopt “regulatory practices [that] include standards for ‘verification’ that national authorities could administer or supervise.”

    The “[s]tandardization of information requirements (or templates) for utilities could also be extended to include [the] international standardization of basic due diligence information and ‘enhanced due diligence’ information for higher-risk relationships.” A “basic standardization would give both parties a ground of expectations to build upon in making judgments about how to do business. It could [also] eliminate a degree of unnecessary duplication of effort and costs.”

    Financial Crimes Agency Rule-Making & Guidance International BAFT BCBS IIF Risk Management Anti-Money Laundering Combating the Financing of Terrorism

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