India establishes committee to study trade-based money laundering

The Asian Development Bank (ADB) has confirmed its support for SWIFT’s Know Your Customer (KYC) Registry for helping banks address the growing challenges of counterparty due diligence in trade finance transactions.

But whilst multilateral development banks (MDBs) generally support the KYC Registry, they are concerned about increasing levels of compliance demanded in the global banking system.

Qualified encouragement
Alongside other MDBs, the ADB says it will encourage banks in its member countries to participate in SWIFT’s compliance registry.

But it has also joined the World Bank Group in expressing concerns over the increasing cost of trade finance compliance, particularly in emerging countries, and fear that this will widen the trade gap between developed and less developed economies in the global marketplace.

KYC launch
Development bankers have also expressed concerns that banks in some emerging markets may face difficulties meeting compliance demands – such as obtaining customers’ corporate records – that are easily met in more developed banking sectors.

The KYC Registry is currently being ramped up with a selected number of banks contributing data. Commercial launch and general availability is set for December 2014.

Categories: Trade Based Financial crimes News

Leave a Reply

%d bloggers like this: