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Wolfsberg News

July 25, 2017

The Wolfsberg Group (the Group) is pleased to endorse a practical Toolkit designed to tackle human trafficking and modern slavery. The Toolkit has been developed by the European Bankers Alliance, a multi-stakeholder working group established and coordinated by the Thomson Reuters Foundation.

The Wolfsberg Group remains concerned about the continuous growth of human trafficking operations across Europe and potential abuse of the financial system associated with this criminal activity. We would therefore emphasise the value of the Toolkit, which includes a set of "red flag" indicators tailored specifically to European financial institutions, together with case studies and resources that will help the detection and reporting of suspicious patterns in financial activity that may be linked to human trafficking. The Group specifically recognises the value of these "red flags," which could be used in assessing findings and staff training.

The Wolfsberg Group also notes that each case study in the Toolkit started from information provided by Law Enforcement, illustrating the importance of information-sharing and collaboration between the public and private sectors.

The Group encourages its members and other financial institutions to put the indicators into practice. A copy of the Toolkit and further information about the Bankers Alliance initiative in Europe, the United States and Asia Pacific can be obtained by contacting the Thomson Reuters Foundation at banksalliance@trust.org.

July 4, 2017

The Wolfsberg Group (the "Group") is pleased to publish updated Guidance as to how Financial Institutions ("FIs") should construct an effective Anti-Bribery and Corruption ("ABC") Compliance Programme. The paper entitled "Anti-Bribery and Corruption Compliance Programme Guidance" ("the Guidance") updates the 2011 Anti-Corruption Guidance paper and, as before, has been developed in collaboration with the Basel Institute on Governance and with input from Transparency International.

The document is designed to provide guidance to the broader financial services industry on how to develop, implement and maintain an effective ABC Compliance Programme. The overall objective of the Guidance is to promote a culture of ethical business practices and compliance with ABC legal and regulatory requirements. The recently published Wolfsberg Guidance on Politically Exposed Persons ("PEPs") helps FIs to address the money laundering risk posed by PEPs and to maintain strong defences against customers potentially involved in bribery and corruption. This Guidance, however, focuses on how FIs can manage their own bribery and corruption risk in respect of the behaviour of their employees and third parties acting on their behalf.

The full Publication Statement on Anti-Bribery and Corruption Compliance Programme Guidance issued by the Wolfsberg Co-Chairs and Executive Secretary and Wolfsberg Anti-Bribery and Corruption Compliance Programme Guidance can be accessed below.

PDFWolfsberg Group Publication statement

PDFWolfsberg Group ABC Guidance

The Wolfsberg Group is also pleased to announce that it is in the process of completing the revisions to its Due Diligence Questionnaire for Correspondent Banks.

The current Wolfsberg AML Questionnaire was developed and published in 2004. Comprising of 27 questions, the purpose was to act as an aid to FIs conducting due diligence (DD) on Correspondent Banking relationships, as per regulatory requirements of the time and their own internal policies and procedures. The Wolfsberg AML Questionnaire has since remained largely unchanged barring minor edits and the inclusion of an additional question in 2014.

The current Wolfsberg AML Questionnaire is outdated and no longer fit for purpose as a means of approaching DD requirements for correspondent banks. This is due to dramatically changed and enhanced regulatory requirements (and expectations), and is evidenced by the fact that a majority of FIs use the questionnaire but add a significant number of additional questions, which have developed over time and often as a result of perceived expectations emanating from enforcement actions, leading to an inconsistent approach and an unduly burdensome process.

The Wolfsberg Group had long noted the need to revise the AMLQ but effectively kicked off its review subsequent to the publication of the Committee on Payments & Market Infrastructure's (CPMI) Consultative Report on Correspondent Banking, the first recommendation of which focused on the use of KYC Utilities in Correspondent Banking Due Diligence, noting: "Relevant stakeholders (e.g. The Wolfsberg Group) may review the templates and procedures used by the different utilities and identify the most appropriate data fields to compile a data set that all utilities should collect as best practice and that all banks have to be ready to provide to banks which require the information."

While the final recommendation of the CPMI's Report on Correspondent Banking no longer referenced the Wolfsberg Group, the revision work has continued with the aim of issuing a revised Due Diligence Questionnaire (DDQ) for Correspondent Banks (as per the Wolfsberg definition), seeking thereby to provide the common standard that the CPMI was seeking to achieve.

The Group will issue the revised DDQ, as well as associated FAQs, completion and implementation guidance throughout the course of the summer 2017. We are also working with the CPMI and a group of KYC Utility Providers to meet the Recommendations of the CPMI Report and foster a more consistent standard across the industry.

Global Banks: Global Standards

The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies.

The Group came together in 2000, at the Château Wolfsberg in north-eastern Switzerland, in the company of representatives from Transparency International, including Stanley Morris, and Professor Mark Pieth of the University of Basel, to work on drafting anti-money laundering guidelines for Private Banking. The Wolfsberg Anti-Money Laundering (AML) Principles for Private Banking were subsequently published in October 2000, revised in May 2002 and again most recently in June 2012.

Since the first set of AML Principles was released, the Group has published a significant number of documents, whether in the form of Principles, Guidance, Frequently Asked Questions (FAQs) or Statements. These can all be found on this website and include, amongst many others, a Statement on the Financing of Terrorism, Anti-Money Laundering Principles for Correspondent Banking, Guidance on a Risk Based Approach for Managing Money Laundering Risks, FAQs on Politically Exposed Persons (PEPs), Trade Finance Principles, Guidance on Anti-Bribery & Corruption Compliance Programmes and a statement endorsing measures to enhance the transparency of international wire transfers to promote the effectiveness of global AML and CTF programmes.

Materials published by the Wolfsberg Group are designed to provide financial institutions (FIs) with an industry perspective on effective financial crime risk management.

There are a number of ways FIs can seek to adhere to the various documents published by the Wolfsberg Group. However, the means by which each FI choses to adopt these documents must make sense for each individual firm, recognising that one size doesn't fit all and that each FI's risk mitigation strategy must be tailored to meet its risk appetite.

The Wolfsberg Group does not advocate that FIs simply adopt each publication, but rather each FI should consider the risks described, the applicable regulatory standards and their own defined risk management strategy. The materials published by the Wolfsberg Group offer a perspective through which FIs may identify gaps or new insights and consider to what extent these gaps or insights require attention. This is a matter for each FI. For example, an FI may identify alternative controls or other compensating measures to the ones suggested, for as long as the risks in question are adequately managed. Furthermore, the risks may indeed be different in different businesses, regions or countries.

Given the dynamic nature of the issues underlying financial crime risk, the Wolfsberg Group reviews and revises its published materials from time to time. FIs should note publication changes and consider how those changes might be addressed within an FI's risk management strategy. The same applies to other interested parties which may have used, referred to or otherwise adopted any of the Wolfsberg Group's publications.

You may reach the websites of the individual member banks of the Wolfsberg Group via the links to the right.

For background information on the Wolfsberg Group and its work, you may find it useful to read the attached articles "The Wolfsberg Group" by Hans-Peter Bauer and Gemma Aiolfi and "The Private Sector becomes active: The Wolfsberg Process" by Mark Pieth and Gemma Aiolfi.

For background information on the Wolfsberg Group and its work, you may find it useful to read the attached articles "The Wolfsberg Group" by Hans-Peter Bauer and Gemma Aiolfi and "The Private Sector becomes active: The Wolfsberg Process" by Mark Pieth and Gemma Aiolfi.