The World Council of Credit Unions published a comment letter in response to the Financial Action Task Force’s (FATF) proposal regarding anti-money laundering/counterfinancing of terrorism (AML/CFT) information sharing in the private sector.
Among the principles proposed by the World Council:
Information sharing between unaffiliated financial institutions is an essential element of effective AML/CFT compliance, especially with respect to correspondent banking and similar relationships. World Council urged FATF to reference the request for information framework established by its guidance on Correspondent Banking Services in its guidance on information sharing between institutions that are not part of the same group.
Information sharing should lead to a system that focuses on filing fewer suspicious transaction reports (STR) under a higher standard focused on actionable plausible evidence of serious wrongdoing as opposed to a system that encourages voluminous filings of STRs with little or no law enforcement or institutional value. Information sharing should be robust not only within a financial institution or group, but also with relevant law enforcement and regulatory bodies.
Information sharing, conducted under appropriate policies and procedures that maintain necessary confidentiality, should be encouraged and should be accompanied by safe harbors from civil or administrative liability.
Substantial effort should be made to ensure that a group’s ability to obtain and review information necessary to carry out its AML/CFT responsibilities is not impaired by local legal requirements. Further, an institution or group should not be penalized where the inability to communicate is the result of local legal barriers and is otherwise unintentional.
Regulations should continuously be revisited to reduce redundancies, reduce unnecessary burdens, and increase opportunities for efficiencies within the AML/CFT framework.
The FATF should encourage the European Commission to propose new EU legislation permitting increased AML/CFT information sharing in the private sector, including within associations of financial institutions.