The contiguous stretch of land from Iraq to Tajikistan remains one of the riskiest geographies for financial institutions shielding themselves from money launderers and terrorist financiers, according to a Swiss nonprofit organization.
In a congressional hearing last May, sanctions experts outlined how gaps in U.S. and EU blacklists could let designated Iranians and other designees exploit the American banking system. But the witnesses failed to point out one important loophole in international sanctions: interbank cover payments.
The Royal Bank of Scotland will pay the United States $500 million over Bank Secrecy Act and sanctions violations committed by the now defunct ABN Amro, U.S. officials said Monday.
For all of the concern over the money laundering risks associated with cover payments and cross-border transactions, there is a simple solution: more transparency, according to an anti-money laundering compliance director.
The U.S. Federal Reserve Bank and The Clearing House have told banks how to comply with new formatting procedures for cover payments wired internationally, the organizations said Monday.
The Wolfsberg Group and Clearing House Association called for banking cooperative Society for Worldwide Interbank Financial Telecommuncation to change the payment instructions it handles to "promote the effectiveness of global anti-money laundering and anti-terrorist financing programs."
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