On 2 July 2020, the Basel Committee on Banking Supervision issued an updated version of its guidelines on ‘Sound management of risks related to money laundering and financing of terrorism’.
The updated version of the guidelines contains a new paragraph 96 in Part IV (role of supervisors) and Annex 5 (interaction and cooperation between prudential and AML/CFT supervisors). Annex 5 sets out specific principles, recommendations and descriptive examples, to facilitate effective and efficient cooperation in relation to authorisation related procedures of a bank, ongoing supervision and enforcement actions. It also describes possible methods of implementation including mechanisms to facilitate such cooperation at the jurisdictional and international level.
The guidelines specifically target banks, banking groups (Parts 2 and 3) and banking supervisors (Part 4). The Financial Action Task Force standards that require countries to apply other measures in their financial sectors and other designated non-financial sectors, or establishing powers and responsibilities for competent authorities are not dealt with in the guidelines. The guidelines are not included in the Basel Committee standards and are only applicable for those jurisdictions that choose to implement them on a voluntarily basis.