Following a recent exercise which explained how a correspondent banking operation could be used by money launderers, an anti-money laundering…

These are the information that can help the correspondent bank to assess the risk profile, the

regulatory compliance, and the operational capacity of the respondent bank, and to verify its identity

and legitimacy. The correspondent bank should obtain and verify the following information about

the respondent bank:

Respondent’s management, nature of license, and major business activity. This can help the

correspondent bank to understand the governance, the legal status, and the core functions of the

respondent bank, and to evaluate its reputation, integrity, and competence.

The quality of supervision in the home country. This can help the correspondent bank to determine

the level of oversight and regulation that the respondent bank is subject to, and to identify any

potential gaps or weaknesses in the anti-money laundering and counter-terrorist financing

(AML/CTF) framework of the home country.

Respondent’s location, in particular the existence of a real physical presence. This can help the

correspondent bank to verify the actual existence and operation of the respondent bank, and to

avoid dealing with shell banks or banks located in high-risk or non-cooperative jurisdictions.

The other option is not necessarily information that should be included to establish a rigorous “Know

Your Respondent” procedure, although it may have some relevance or importance depending on the

circumstances and the nature of the correspondent relationship. Option 2 describes computer

equipment and software capability, which may be useful to assess the technical and operational

compatibility and efficiency of the respondent bank, but it is not essential to evaluate its risk or

compliance level.

ACAMS CAMS Certification Video Training Course - 6th Edition1

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)2

ACAMS CAMS Study Guide - 6th Edition, Chapter 7, pages 154-155

https://www.acams.org/wp-content/uploads/2019/09/ACAMS-CAMS-Study-Guide-6th-EditionChapter-7.pdf