Document ID: chunk:federal_register_of_legislation:F2024C01198:body:0:p20
Version: federal_register_of_legislation:F2024C01198
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Privacy Act 1988, including the requirement to comply with the Australian Privacy Principles, even if they would otherwise be exempt from the Privacy Act. For further information about these obligations, please go to http://www.oaic.gov.au or call 1300 363 992.

CHAPTER 3 Correspondent Banking
          Part 3.1 Entry into a correspondent banking relationship

     3.1.1 This Part is made for subsection 96(1) of the Act.

     Carrying out an initial assessment

     3.1.2 The first institution (the correspondent) must conduct due diligence to assess the money laundering, financing of terrorism or other serious crime risks associated with entry into a correspondent banking relationship with another financial institution (the respondent) that will involve a vostro account.

     3.1.3 The correspondent must consider the following factors when assessing money laundering, financing of terrorism or other serious crime risks:

         (1) the ownership, control and management structures of:

         (a) the respondent; and

         (b) the ultimate parent company of the respondent, if any;

         (2) the nature, size, and complexity of the respondent's business, including:

             (a) its products, services, delivery channels and customer types; and

             (b) the types of transactions carried out on behalf of underlying customers as part of the correspondent banking relationship and the services provided to underlying customers that relate to such transactions;

         (3) the country or countries in which:

             (a) the respondent operates or resides; and

             (b) if the ultimate parent company of the respondent has group-wide anti-money laundering and counter-terrorism financing systems and controls, and the respondent operates within the requirements of those controls—the ultimate parent company operates or resides;

              Note 1:       Country has the meaning given by section 5 of the Act.

              Note 2:       A foreign country may include a region or regions. These regions may have a different risk profile to each other or the rest of the foreign country.

         (4) the existence and quality of any anti-money laundering and counter-terrorism financing regulation and supervision in the country or countries identified under subparagraph (3) and the respondent's compliance practices in relation to those regulations;

         (5) the adequacy and effectiveness of the respondent's anti-money laundering and counter-terrorism financing systems and controls;

         (6) publicly-available information relating to the reputation of the respondent and any related bodies corporate, including whether the respondent has been the subject of:

             (a) a regulatory investigation relating to implementation of anti-money laundering, counter-terrorism financing or sanctions obligations; or

             (b) adverse regulatory action relating to implementation of anti-money laundering, counter-terrorism financing or sanctions obligations; or

             (c) an investigation or criminal or civil proceedings relating to money laundering, financing of terrorism or other serious crimes;

          (7) if the correspondent maintains vostro accounts that can be accessed directly by the customers of the respondent (payable-through accounts)—the respondent:

            (a) conducts customer due diligence and ongoing customer due