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.

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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: 15

Price (individual): GBP80.00 including UK VAT where applicable.

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Course curriculum

  • 1

    About this course (prerequisite reading)

    • Caveat and Legal

    • Status of this Course

    • Pre-requisite

    • About Essentials Courses

  • 2

    1. Correspondent banking and payment systems: overview

    • 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

    2. What is.....

    • 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

    3. The Development of Payment Systems

    • 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

    4. Bank accounts, payment instructions and funds transfers.

    • 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

    5. Correspondent banking basics

    • 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

    6. The need for speed and the clearing revolution.

    • 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

    7. Uses for correspondent banking

    • 7.1 Acceptable uses for correspondent banking

    • 7.2 Unacceptable uses for correspondent banking

  • 9

    8. How correspondent banking became a contentious issue.

    • 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

    9. Defining criminal conduct in an international environment

    • 9.1 Understanding predicate offences

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

  • 11

    10. Not exactly banking but exactly like banking

    • 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

    11. Correspondent banking, etc. and money laundering

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

  • 13

    12 Correspondent banking, etc. and the financing of terrorism

    • 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

    13. Correspondent banking and tax fraud / evasion

    • 13.1 Comparing tax evasion and money laundering

    • 13.2 The involvement of correspondent banking in tax evasion.

  • 15

    14. Correspondent banking - sanctions and embargoes

    • 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

    15. Transfer of funds – legal aspects 1

    • 15.1 Cash, etc. transaction reporting

    • 15.2 Aggregation

    • 15.3 Suspicious activity reporting

    • 15.4 Case Study

  • 17

    16. Letters from abroad

    • 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

    17. Respondent and correspondent bank: Risk Assessment and de-risking

    • 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

    18. Case Study: Deutsche Bank ats the New York State Department of Financial Services 2020 – the Correspondent Banking aspects of the case.

    • 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

    19. USA PATRIOT Act – correspondent bank certification

    • 19.1 Requirements and form.

  • 21

    20. ISO20022 – a new messaging standard for global money transfers.

    • 20.1 What is ISO20022? -1

    • 20.1 What is ISO20022? 2

  • 22

    21. Conclusions

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

    • 20.2 Afterword

  • 23

    Examination

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