TheBank for International Settlements has provided final guidance (PDF) on duediligence and transparency regarding cover payment messages incross-border wire transfers.The new rules are intended to clampdown on the use of cover payments to hide the identities of wiretransfer recipients in support of regulatory initiatives on anti-moneylaundering and terrorism financing.
In January Lloyds TSB wasslapped with a $350 million penalty by the US Justice department fordeliberately falsifying wire transfers destined for countries orindividuals on US sanctions lists.
According to court documents,Lloyds deliberately removed material information - such as customernames, bank names and addresses - from payment messages so that thewire transfers would pass undetected through filters at US financialinstitutions.
The stripping of information allowed more than$350 million in transactions to be processed by US correspondent banksthat might have otherwise been blocked or rejected due to sanctionsregulations or for internal bank policy reasons.
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