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FinCEN Clarifies Definition of Correspondent Banking for AML Diligence
printThe processing of checks and drafts from foreign institutions does not constitute the establishment of a correspondent relationship, the U.S. Treasury Department's Financial Crimes Enforcement Network said. Therefore, simply processing a negotiable instrument, such as a check, for a foreign bank would not require a U.S. financial institution to conduct enhanced diligence on its foreign counterpart, FinCEN said in a ruling on correspondent banking procedures issued Wednesday. FinCEN defines correspondent relationships as those established for a foreign institution to receive deposits, make payments or handle financial transactions. Under U.S. regulations, financial institutions that operate in the U.S. must conduct "enhanced,"...
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