Wolfsberg Anti-Money Laundering (AML) Principles Overview

Customer due diligence (CDD) = Process to verify the identity of customers and assess the risks they pose Enhanced due diligence (EDD) = Additional scrutiny for higher-risk customers to mitigate potential money laundering risks Continuous monitoring = Ongoing surveillance to detect and report suspicious activities Risk-based approach = Tailoring AML measures based on the level of risk posed by customers or transactions

Correspondence banking = Banks providing services for each other to conduct business globally Know Your Customer (KYC) investigation = Process where banks investigate and verify each other's identities and activities Cross-border correspondent banking relationships = Establishing and maintaining banking relationships across different countries Domestic relationships examination = Conducting risk-based assessments with less depth for local banking connections

Staff training = Ensuring employees understand AML requirements and can identify suspicious activities Management oversight = Supervising AML policies and procedures to ensure effective implementation Effective prevention of money laundering activities = Implementing measures to stop illicit financial transactions Responsible business decisions = Making informed choices regarding correspondent banking customers based on risk assessments

<p>Guidelines for correspondence banking = Providing instructions for conducting KYC investigations in correspondent banking Risk-based examination = Evaluating the level of risk associated with cross-border banking relationships Effective risk management = Implementing strategies to identify and mitigate AML risks effectively Financial institutions' responsibilities = Ensuring compliance with AML regulations and making informed decisions on correspondent banking</p> Signup and view all the answers

<p>Suspicious activity reporting = Alerting authorities about potentially illegal financial transactions Compliance with guidelines = Following established AML principles to prevent money laundering activities Comprehensive framework implementation = Putting in place all necessary measures for effective AML policies Prevention of money laundering activities = Taking actions to stop the flow of illicit funds through financial systems</p> Signup and view all the answers

<p>Global business conduct facilitation = Enabling banks to provide services internationally through correspondent banking Risk mitigation through EDD = Reducing money laundering risks by intensifying scrutiny on higher-risk customers Guidelines for risk-based examination = Providing instructions on how to assess risks in correspondent banking relationships Training on identifying illicit activities = Educating staff on recognizing suspicious behaviors to enhance AML controls</p> Signup and view all the answers

<p>Sanction Screening = Control measure used by financial institutions to detect, prevent, and manage sanction risks Transaction Screening = Identifies transactions involving sanctioned individuals or entities Customer Screening = Identifies sanctioned targets during the onboarding process or throughout the customer relationship Wolfsberg Principles = Support the use of artificial intelligence by financial institutions in financial crime compliance programs</p> Signup and view all the answers

<p>Promoting safe and efficient international financial services = BAFT Supports the responsible use of Artificial Intelligence in anti-money laundering = Wolfsberg Group Provides guidelines for assessing sanction screening controls = Wolfsberg Group Dedicated to promoting safe and efficient international financial services = BAFT</p> Signup and view all the answers

<p>Legitimate Purpose = One of the five main elements emphasizing ethical data principles Proportionate Use = Ensures the appropriate use of Artificial Intelligence in compliance programs Responsible Oversight = Emphasizes transparency and regular validation of systems Design and Technical Expertise = Focuses on the responsible use of AI in anti-money laundering</p> Signup and view all the answers

<p>Reference data = An important aspect covered in sanction screening guidelines Testing for quality assurance = Part of ensuring effective sanction screening controls Criteria for investigating alerts = Guidance provided for handling alerts during the screening process Technology in screening = Can be automated, manual, or a combination based on guidelines</p> Signup and view all the answers

<p>Middle East and Asia = Regions where the association consists mainly of banks from Global representation = Organizations from various regions involved in promoting safe financial services Europe and North America = Regions with significant involvement in sanction screening guidelines Asia-Pacific countries = Areas where financial institutions align sanction screening programs with specific risk exposure</p> Signup and view all the answers

<p>Correspondent Banking Due Diligence Questionnaire (CBDDQ) = Standardized questionnaire for correspondent banking relationships Wolfsberg Private Banking Principles = Focuses on risk reduction in the private banking industry 2017 Wolfsberg Guidance on Politically Exposed Persons = Updates guidance on PEP identification and risk management Trade Finance Principles = Outlines standards for managing financial crime risks in trade finance activities</p> Signup and view all the answers

<p>Client acceptance policies = Importance emphasized in private banking principles Risk-based approach for Politically Exposed Persons (PEPs) = Emphasized for all PEPs, domestic and foreign Senior management approval for relationships with PEPs = Advocated by Wolfsberg Group for managing PEP risks Overall risk assessment = Emphasized for trade finance activities to manage financial crime risks</p> Signup and view all the answers

<p>PEP screening challenges = Recognized in managing PEP risks and importance of training Data protection challenges = Acknowledged in trade finance principles Different jurisdictional standards = Recognized difficulty in global cooperation for combatting financial crime Price verification difficulties = Outlined as a challenge in trade finance activities</p> Signup and view all the answers

<p>Establishing and managing correspondent banking relationships = Guidelines include defining accountability and oversight Improving due diligence process for financial institutions = Purpose of Correspondent Banking Due Diligence Questionnaire (CBDDQ) Detecting large-scale corruption among PEPs = Focus of 2017 Wolfsberg Guidance on Politically Exposed Persons Managing financial crime risks in trade finance activities = Purpose of Trade Finance Principles</p> Signup and view all the answers

<p>Prominent political positions lists for high-risk situations focus = Suggested for governmental publication to aid financial institutions Cooperation among governments, Financial Institutions, trade bodies, and logistics providers = Recommended to combat financial crime within trade finance activities Training and awareness among employees importance = Emphasized in managing PEP risks and challenges Reducing risk within the private banking industry = Focus of Wolfsberg Private Banking Principles</p> Signup and view all the answers