Global banks will have to vet all customers for terrorism links as part of a crackdown on money laundering and criminal finance.
Terrorist screening “should be carried out irrespective of the risk profile attributed to the customer,” the Basel Committee on Banking Supervision said in proposals published today. Lenders should immediately freeze any assets from clients that fail the test, according to the guidelines.
Regulators around the world have cracked down on money laundering after the 2008 financial crisis. The U.S. fined HSBC Holdings Plc (HSBA) $1.9 billion last year over claims the lender gave terrorists and drug cartels access to the U.S. financial system. Standard Chartered Plc also agreed to pay $667 million to U.S. regulators after they alleged the bank helped Iran launder $250 billion. The U.K. has fined three banks for failing to have effective anti-money laundering controls in place for high-risk customers.
The decision “to enter into or pursue business relationships with higher-risk customers should entail enhanced due diligence measures, such as approval to enter into or continue such relationships, being taken by senior management,” said the committee, which is based in Basel, Switzerland and comprised of global regulators and central bankers.
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