The BCBS says different supervisory functions should exchange information and cooperate both domestically and across borders, regardless of the institutional setting.
The BCBS (Basel Committee on Banking Supervision) is proposing revisions to strengthen the interaction and cooperation between prudential and AML/CFT supervisors.
The proposed changes to its June 2017 guidelines on the sound management of risks related to money laundering and terrorism financing include a new provision, under “Section IV: The role of supervisors”, that recommends establishing an effective cooperative system “to ensure that ML/FT risks are adequately supervised in the domestic and cross-jurisdictional context for the benefit of the two functions, without unduly duplicating efforts.”
The proposed changes also includes a supplementing Annex providing detailed guidelines on when and how prudential and AML/CFT supervisory functions could exchange information and cooperate with each other.
The Annex also covers processes of information exchange, the relationship with third parties (such as financial intelligence units) and confidentiality and data protection issues.
“Adequate information exchange and cooperation should take place among different supervisory functions regardless of the institutional setting and both in the domestic and cross-border context,” the BCBS says.
The revisions are intended to enhance the effectiveness of supervision of banks’ money laundering and terrorism financing risk management, consistent with and complementary to the FATF (Financial Action Task Force) standards (and other BCBS principles and guidelines).
The BCBS Committee invites comments on the consultative document, available here, by 6 February 2020.