Due diligence and transparency regarding cover payment messages related to cross-border wire transfers

The Basel Committee has published for public comment its preliminary views on supervisory expectations relating to transparency in payment messages, particularly in anticipation of changes to technical standards for cross-border wire transfers.

The processing of cross-border wire transfers frequently involves several financial institutions. In addition to the originator's bank and the beneficiary's bank, additional banks are often involved. This paper examines the circumstances where one or more of these intermediary banks is located in a jurisdiction other than the jurisdictions where the bank of the originator and the bank of the beneficiary are located. It describes the supervisory expectations, pursuant to the current initiatives supported by the Basel Committee to enhance transparency in payment messages, about information that must be included in payment messages related to cover payments, the various mechanisms that must be used to ensure that complete and accurate information has been included in such messages, and the use that should be made of the information for AML/CFT purposes.

Comments may be sent by no later than 16 September 2008 via e-mail to baselcommittee@bis.org. Alternatively, comments may be addressed to:

Basel Committee on Banking Supervision
Bank for International Settlements
Centralbahnplatz 2
CH-4002 Basel
Switzerland

The Committee intends to share these comments with other standards setters, in particular the Financial Action Task Force. They will also be made public. If you do not want your comment to be made public, or if you request anonymity, please specify it clearly at the outset of your comments.

The final version of this paper was released in May 2009.