Essentials. The financial crime risks of Correspondent Banking, Value-Transfer Systems and Remittances.

Any business that provides banking services to a customer that provides banking or banking-like services to others has very specific financial crime risk and compliance issues. Correspondent banking is the obvious example but there are more...

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About this course

There is something almost mystical about correspondent banking but its actually very simple. 

And, at its heart, ancient.

In the increasingly fragmented world of payments, the old principles are being overlooked by banks anxious to grab a piece of the action from the upstarts. 

As they, and regulators, scramble to think up new ways of assessing and managing risk, they are forgetting that they already know how. 

This course explains the risks and compliance issues facing both sides - the provider of top-level banking services and those making use of them. 

To understand correspondent banking and we need to understand how clearing systems work and how they developed over thousands of years. 

And when we understand that, we find that we also understand the world of remittances. 

In this course, we study all of these, and more, to provide a uniquely holistic comprehension not only of how the systems work but what risks they provide for both users and providers. 

We also look at how correspondent banking became so demonised and the steps taken to identify, contain and control the risks that it presents while preserving the essential services that it provides to all those who have a need to make international payments or inter-bank payments in a currency other than their own.

The simple response is simply to de-risk by refusing to service these areas. And yet, the ethical, moral and – arguably – legal and regulatory effect of so doing can be seriously detrimental to a business. 

In this course we look at how blanket de-risking can - and should - be replaced with selective action.

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Course level: Senior

Language: English

Test: yes

Course award Certificate: Yes

Access to course: unlimited for 12 months; auto-termination at 12 months.

Return to previous pages: Yes

Course certificate validity: one year from the date of completion of the test.

Portable CPD (TM) hours (where recognised): 8 hours

Certification credits: 35

Price (individual): including UK VAT where applicable.

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Course curriculum

  1. 1

    • Caveat and Legal

    • Status of this Course

    • Pre-requisite

    • About Essentials Courses
  2. 2

    • 1.1 Correspondent banking is a product of history and the result of a network of agreements between banks.

    • 1.2 Where we’ve been, where we are and where we are going

    • 1.3 Basic money transfer systems

    • 1.4 Terminology: There is no such thing as "a hawala" or "hawalas."

    • 1.5 Correspondent banking terms
  3. 3

    • 2.1 What is correspondent banking?

    • 2.2 What are value transfer systems?

    • 2.3 What are asset transfer systems?

    • 2.4 What are remittance systems?

    • 2.5 What is a pass-through or payable-through account
  4. 4

    • 3.1 In the beginning 1.

    • 3.2 In the beginning 2. Scenario.

    • 3.3 In the beginning 3.

    • 3.4 Chop and hawala: case studies

    • 3.5 The legal standing of hawala, etc.

    • 3.6 Capital flight and flight capital - 1

    • 3.7 Capital flight and flight capital - 2

    • 3.8 Capital flight and flight capital – 3 – proceeds of consequential crime.

    • 3.9 Coronavirus, pandemic and international criminal money flows.
  5. 5

    • 4.1 Banking – core services and what ″banking″ really means.

    • 4.2 Payment instructions.

    • 4.3 The funds transfer system that is not a messaging system.
  6. 6

    • 5.1 How correspondent banking works – 1

    • 5.2 How correspondent banking works – 2 - Scenario

    • 5.3 How correspondent banking works – 3

    • 5.4 How correspondent banking works – 4 - Scenario

    • 5.5 Truncation, the dematerialisation of money and inter-bank funds flows – 1

    • 5.6 Truncation, the dematerialisation of money and inter-bank funds flows – 2

    • 5.7 Truncation, the dematerialisation of money and inter-bank funds flows – 3

    • 5.8 Truncation, the dematerialisation of money and inter-bank funds flows – 4 Case Studies
  7. 7

    • 6.1 How technology has moved on from settlement meetings.

    • 6.2 The fast inter-bank messaging system – 1

    • 6.3 The fast inter-bank messaging system – 2

    • 6.4 The UK's system, effective 30 June 2020 to protect against mis-delivery of transfers. 1

    • 6.5 The UK's system, effective 30 June 2020 to protect against mis-delivery of transfers. 2

    • 6.6 The fast inter-bank messaging system – 3

    • 6.7 The fast inter-bank messaging system - 4

    • 6.8 Come Alive with PEPSI and other EU funds transfer initiatives and mistakes - 1

    • 6.9 Come Alive with PEPSI and other EU funds transfer initiatives and mistakes - 2

    • 6.10 Come Alive with PEPSI and other EU funds transfer initiatives and mistakes - 3
  8. 8

    • 7.1 Acceptable uses for correspondent banking

    • 7.2 Unacceptable uses for correspondent banking
  9. 9

    • 8.1 Early concerns as to correspondence banking – 1

    • 8.2 Early concerns as to correspondence banking – 2

    • 8.3 Early concerns as to correspondence banking – 3

    • 8.4 Early concerns as to correspondence banking – 4

    • 8.5 The demonising of correspondent banking – 1

    • 8.6 The demonising of correspondent banking – 2

    • 8.7 The demonising of correspondent banking – 3

    • 8.8 The demonising of correspondent banking – 4

    • 8.9 The demonising of correspondent banking – 5

    • 8.10 The demonising of correspondent banking – 6

    • 8.11 The demonising of correspondent banking – 7

    • 8.12 The demonising of correspondent banking – 8 CASE STUDY
  10. 10

    • 9.1 Understanding predicate offences

    • 9.2 Why definitions of predicate crime are relevant to international payment systems.
  11. 11

    • 10.1 Not exactly banking but exactly like banking – 1

    • 10.2 Not exactly banking but exactly like banking – 2

    • 10.3 Not exactly banking but exactly like banking – 3

    • 10.4 Not exactly banking but exactly like banking – 4 - Risk assessments by banks of service providers inc. FinTech.
  12. 12

    • 11.1 Money transfers are, first, asset reallocation and then asset relocation
  13. 13

    • 12.1 We're looking for money moved, not money stored.

    • 12.2 Case study: terrorist financing 11 September 2001 - 1

    • 12.3 Case study: terrorist financing 11 September 2001 - 2

    • 12.4 Retrospective action against money stored

    • 12.5 Dealing with high-risk jurisdictions -1

    • 12.6 Dealing with high-risk jurisdictions - 2
  14. 14

    • 13.1 Comparing tax evasion and money laundering

    • 13.2 The involvement of correspondent banking in tax evasion.
  15. 15

    • 14.1 Overview of sanctions and embargoes.

    • 14.2 Obligations on correspondent banks, etc. with regard to sanctions and embargoes.

    • 14.4 Correspondent banking, etc. - blacklists, grey lists and more

    • 14.5 Looking out for suspicious activity - 1

    • 14.6 Looking out for suspicious activity – Case Studies - 1

    • 14.7 Looking out for suspicious activity – Case Studies - 2

    • 14.8 Looking out for suspicious activity – Case Studies 3

    • 14.9 Looking out for suspicious activity – 2 – Human Trafficking
  16. 16

    • 15.1 Cash, etc. transaction reporting

    • 15.2 Aggregation

    • 15.3 Suspicious activity reporting

    • 15.4 Case Study
  17. 17

    • 16.1 When Letters are not Correspondence

    • 16.2 Why escrow is important in trade transactions and relevant to correspondent banking.

    • 16.3 Conditions, confirmation and terminology.

    • 16.4 Correspondent banks must be cautious in trade transactions.

    • 16.5 Financial Crime aspects insofar as they relate to correspondent banking

    • 16.6 Smart Contracts
  18. 18

    • 17.1 Background to risk assessments in correspondent banking - 1

    • 16.7 Background to risk assessments in correspondent banking - 2

    • 17.3 Early attempts at widespread risk assessments in correspondent banking.

    • 17.4 The Wolfsberg Group’s Correspondent Banking Questionnaire.

  19. 19

    • 18.1 It's not about Jeffery Epstein

    • 18.2 Deutsche Bank’s correspondent banking relationship with FBME – 1

    • 18.3 Deutsche Bank’s correspondent banking relationship with FBME – 2

    • 18.4 Deutsche Bank’s correspondent banking relationship with FBME – 3

    • 18.5 Deutsche Bank’s correspondent banking relationship with FBME – 4

    • 18.6 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 1

    • 18.7 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 2

    • 18.8 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 3

    • 18.9 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 4

    • 18.10 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 5

    • 18.11 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 6

    • 18.12 Deutsche Bank’s correspondent banking relationship with Danske Estonia – 7

    • 18.13 Danske Bank A/S Responses to the Wolfsberg Group money laundering risk and compliance questionnaire.
  20. 20

    • 19.1 Requirements and form.

  21. 21

    • 20.1 What is ISO20022? -1

    • 20.1 What is ISO20022? 2
  22. 22

    • 21.1 It’s not complicated unless it’s made to be so.

    • 20.2 Afterword
  23. 23

    • Examination - Essentials. Correspondent Banking, Value Transfer Systems and Remittances.