Start at the service level
Banking can involve several designated services. Identify the actual account, payment or other service and its conditions.
A customer can use more than one service. The service and customer facts determine the applicable AML requirements.
A bank can also serve another bank
In correspondent banking, a correspondent provides services to a respondent financial institution in another country. Underlying customers may not deal directly with the correspondent.
For relationships involving a vostro account, sections 96 and 100 set due diligence, record and approval requirements. The required geographical link must exist.
These duties complement other applicable AML obligations. They do not replace every customer or reporting requirement.
Sources: Federal Register of Legislation: 96 and 100; AUSTRAC: Definition; due diligence and other obligations.
- Underlying customer
Uses the respondent institution.
- Respondent bank
Uses a correspondent relationship for transactions.
- Correspondent bank
Assesses the relationship and applicable additional due diligence. Information about underlying customers may be limited.
A bank can provide access for another bank’s customers
The arrows show access through institutions, not ownership. The correspondent can have limited information about the respondent’s underlying customers.
Follow the process from top to bottom.
Invented example: inconsistent business activity
In a fictional customer review, account activity differs from the stated business purpose. Staff examine the evidence and record the response.
A difference can require further review. It is not proof of a crime. Staff assess the separate suspicious matter reporting question on its legal conditions.
Keep reporting decisions distinct
A suspicious matter report concerns the section 41 conditions. A threshold transaction report and a transfer report have different conditions.
An amount alone does not settle all reporting questions. Apply the relevant exemptions and transition provisions.
Sources: Federal Register of Legislation: 41-46; AUSTRAC: Transition to international value transfer service reporting.
Give the next team usable evidence
A practical handover identifies the customer, service, evidence, unresolved issue and responsible person. Retain the reason for the decision.
If information crosses systems, preserve usable links. A completed handover field does not show that the next reviewer received the evidence.