Definition of wire transfers and activities of involved parties
Straight-through processing – transactions are conducted electronically without the need for manual intervention
The wire transfer and the accompanying payment message travel together
Wire transfer, R. 16
Originator
Ordering financial institution
Intermediary financial institution(s)
Places the order to make the amount of funds available to the beneficiary
Beneficiary financial institution
Beneficiary
Receives the amount of funds
Initiates the wire transfer and transfers the funds on behalf of the originator
Receives the wire transfer and makes the funds available to the beneficiary
Irrespective of whether the originator and the beneficiary are the same person
Participates in a serial or cover payment chain
Receives and transmits a wire transfer on behalf of:
· the ordering financial institution and
· the beneficiary financial institution or
· another intermediary financial institution
The funds
Serial payment – direct sequential chain of payment where the wire transfer and accompanying payment message travel from, through and to these financial institutions
Cover payment– a wire transfer that includes the cover
Cover – the routing of the funds instruction sent directly by the ordering financial institution to the beneficiary financial institution
Batch transfer – a transfer of a number of individual wire transfers that are being sent to the same financial institutions
9.3. The scope of applying AML/CFT measures to wire transfers
Qualifying wire transfer – a cross-border wire transfer above the applicable threshold of no higher than USD/EUR 1,000
Cross-border wire transfer – the ordering financial institution and beneficiary financial institution are located in different countries
Also any chain of wire transfer in which at least one of financial institutions involved is located in a different country
The system used to transfer the payment message may be located in another country
Includes wire transfers that take place entirely with the borders of the European Economic Area (EEA)
An entity may petition the FATF to be designated supra-national jurisdiction
Domestic wire transfer – the ordering financial institution and beneficiary financial institutions are located in the same country
Payment by a credit, debit or prepaid card for the purchase of goods or services
As long as the card number accompanies all transfers
Financial institution-to-financial institution transfers and settlements
Both the originator and the beneficiary are financial institutions acting on their own behalf
Financial institutions are required to apply AML/CFT measures to the following types of wire transfers, R. 16, IN
The following types of wire transfers are not covered by AML/CFT measures
However, when a credit, debit or prepaid card is used as a payment system to effect a person-to-person wire transfer, this transaction should be covered by AML/CFT measures
9.4. AML/CFT measures of information gathering related to wire transfers
The originator’s information
The name
The account number
Address or
National identity number or
Customer identification number or
Date and place of birth or
The beneficiary’s information
The name
The account number
Unique transaction reference number
In the absence of an account
This unique number refers to a record held by the originating financial institution which contains at least one of the following
1. To gather required originator and beneficiary information and transmit throughout the payment chain
2. To monitor wire transfers for the purpose of detecting those which lack required information and take appropriate measures
3. To take freezing action and avoid conducting transactions with persons and entities for the purpose of prevention and suppression of terrorism and terrorist financing (as per the obligations set out in the UNSC resolutions)
The objectives of applying AML/CFT measures to wire transfers, R. 16
Financial institutions are required to gather and retain the following information on parties of all wire transfers
The following information on the originator should also be gathered and retained by parties of qualifying cross-border wire transfers
9.5. AML/CFT responsibilities of financial institutions performing wire transfers
Ordering financial institution
Intermediary financial institutions
Beneficiary financial institution
Originator information
Beneficiary information
Required and accurate
Should ensure that wire transfers contain this information
Should maintain it in accordance with R. 11
Should not execute the wire transfer if it does not comply with the requirements
Should ensure that all information that accompanies a wire transfer is retained with it
Effective risk-based policies and procedures for identifying wire transfers lacking required information and determining
When to execute, reject, or suspend a wire transfer
The follow-up action
It has to be consistent with straight-through processing
For qualifying wire transfers the identity of the beneficiary should be verified
Should take reasonable measures to identify cross-border wire transfers that lack required information
It is possible to use one set of originator information for a batch transfer from the single originator
In case of domestic wire transfers it is possible to include only the account number or a unique transaction reference number, provided that other information can be made available by other means and it will be possible to track back the transaction
9.6. AML/CFT obligations for persons that provide money or value transfer services
Money or value transfer services (MVTS), R. 14
They should be licensed or registered by a competent authority
There should be effective systems for monitoring their compliance with the AML/CFT measures
Competent authorities should identify persons that carry out MVTS without a license or registration
And apply appropriate actions
Financial institutions that are already licensed or registered and under such license or registration are permitted to provide
Natural or legal persons that provide
It is not required to impose separate licensing or registration for MVTS
Agents of MVTS providers
If these institutions are subject to AML/CFT requirements
MVTS provider should maintain a current list of its agents
Competent authorities of countries where the MVTS provider and its agents operate should be granted access to this list
The MVTS provider needs to include the agents into its AML/CFT program
The agents should be monitored for compliance with the program
Either of
Both providers and agents should comply with relevant AML/CFT requirements on wire transfers (R. 16)
