Swift Swift Financial Crime Prevention & AML

Question 1

What is the primary AML concern with correspondent banking via SWIFT?

Accepted Answer

Nested correspondent relationships can obscure the ultimate originator of funds

Answer

Nested correspondent banking creates chains of banks where the originating customer is hidden, increasing money laundering risk.

Question 2

What does the FATF Recommendation 16 (the 'Travel Rule') require in SWIFT payments?

Accepted Answer

Originator and beneficiary information must accompany wire transfers

Answer

FATF Recommendation 16 requires that accurate originator and beneficiary information travel with wire transfers throughout the payment chain.

Question 3

In SWIFT MT103 messages, which fields carry the originator information required under the Travel Rule?

Accepted Answer

Field 50 (Ordering Customer) and Field 52 (Ordering Institution)

Answer

Fields 50 and 52 carry the ordering customer and institution details required to satisfy Travel Rule originator information requirements.

Question 4

What is 'KYC' in the context of SWIFT correspondent banking?

Accepted Answer

Know Your Customer — due diligence on the identity and risk profile of banking clients and counterparties

Answer

KYC (Know Your Customer) refers to due diligence processes banks use to verify identities and assess the money laundering risk of clients and correspondent banks.

Question 5

What is the KYC Registry operated by SWIFT?

Accepted Answer

A centralized platform where financial institutions share standardized KYC documentation with correspondents

Answer

The SWIFT KYC Registry allows banks to upload their KYC documentation once and share it securely with multiple correspondent banking partners.

Swift Practice Test

Swift Practice Test

Swift Swift Financial Crime Prevention & AML