The Basel Committee on Banking Supervision has updated its guidelines on the management of risks related to money-laundering and financing of terrorism. These guidelines are an attempt to make the supervision of the AML/CFT frameworks of banks more effective, in line with the recommendations of the Financial Action Task Force (FATF).
The guidelines focus on the importance of risk assessment and mitigation, involvement of the board of governors in the supervision of AML procedures and adequate delegation of responsibilities in banks. Moreover, the guidelines dictate that AML policies must be communicated to all employees, so they know how to identify and report suspicious transactions. Banks should also appoint a chief AML/CFT officer who would be the point of contact for all AML/CFT matters, for both internal and external stakeholders. Further, banks must regularly conduct internal audits of their AML/CFT policies, compliance and personnel training.
The revised guidelines emphasize the importance of collaborative information exchange in regard to authorization related procedures of a bank, supervision and enforcement actions. Additionally, the guidelines provide the possible mechanisms to enable this information exchange regionally as well as internationally.