The Basel Committee on Banking Supervision (BCBS) has published a set of guidelines which describe how banks should include the management of risks related to money laundering and financing of terrorism within their overall risk management framework.

The guidelines are consistent with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation issued by the Financial Action Task Force (FATF) in 2012 and supplement their goals and objectives.

The BCBS has, in some instances, included cross-references to FATF standards in the guidelines to help banks in complying with national requirements based on the implementation of those standards. However, as the BCBS’ intention is not to simply duplicate the existing FATF standards, cross-references are not included as a matter of routine.

In an effort to rationalise the BCBS’ publications on anti-money laundering/countering financing of terrorism (AML/CTF), the guidelines merge and supersede two previous BCBS publications dealing with related topics. These are Customer due diligence for banks (October 2001) and Consolidated KYC risk management (October 2004). In updating these papers, the BCBS has also increased its focus on risks associated with the usage by banks of third parties to introduce business and the provision of correspondent banking services. Despite their importance and relevance, other specific risk areas such as politically exposed persons, private banking and specific legal structures that were addressed in the previous papers, have not been specifically developed in the guidance as they are already the subject of existing FATF publications (for example the FATF guidance on politically exposed persons).

The BCBS states that the guidelines specifically target banks, banking groups and banking supervisors. It also notes that some of the requirements may require adaptation for use by small or specialised institutions, to fit their specific size or business models. However, the BCBS states that it is beyond the scope of the guidance to address these adjustments.

View Risk management guidelines related to anti-money laundering and terrorist financing by the Basel Committee, 15 January 2014