The Wolfsberg Group, the Banking Commission of the International Chamber of Commerce and the BAFT (an international banking association) have jointly published, Trade Finance Principles. This document updates the earlier Wolfsberg Group paper on trade finance principles that was last updated in 2011.
Essentially, the Trade Finance Principles outline the role of financial institutions in the management of processes to:
- address the risks of financial crime associated with trade finance activities; and
- aid compliance with national and regional sanctions and embargoes and with the non-proliferation of weapons of mass destruction requirements of the United Nations.
Importantly, the core principles within the earlier Wolfsberg paper have not been changed, nor have the responsibilities of the banks involved in trade transactions to have a good knowledge of their customer or instructing party, the business that they conduct and with whom and where they are situated. Neither has the requirement for banks to follow strictly the regulations aimed at detecting and preventing money laundering and terrorist financing. However, the core principles have been expanded to give more detail around what is meant by various risk mitigation activities, describes the challenges and limitations faced and also recommends actions that law enforcement, customs and other government agencies and policy makers still need to address to help the financial services industry meet its obligations under financial crimes compliance frameworks.
View Wolfsberg news, 24 January 2017