WASHINGTON Guidelines proposed Wednesday by the Basel Committee on Banking Supervision would commit regulators to making sure that banks adopt a detailed regimen of anti-money-laundering and anti-fraud controls.
The Basel Committees 26-page proposal, Customer Due Diligence for Banks, outlines procedures in four areas: customer acceptance, customer identification, monitoring of high-risk accounts, and risk management. According to a press release, the paper is expected to become the benchmark for supervisors to establish national practices and for banks to design their own programs.
The Basel Committee said the effort is not aimed specifically at money laundering, but at the broader target of banks safety and soundness.
Rigorous customer due diligence is a key part of banks risk management, and critical to safeguarding confidence and the integrity of the banking system, William J. McDonough, president of the Federal Reserve Bank of New York and chairman of the Basel Committee, said in a press release.
Drafted by an international working group of financial services regulators, the paper praised industry attempts at self-regulation, including the Wolfsberg Principles, a set of anti-laundering safeguards recently adopted by a group of large international institutions. However, it said, Voluntary codes of conduct are not in themselves sufficient to ensure market integrity or sound risk management.
The paper is available at the groups Web site, www.bis.org. Comments are due by March 31.