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

MT messages contain insufficient encryption

Answer

SWIFT BIC codes reveal account holder identity

Answer

Correspondent banks cannot screen transactions in real time

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

Banks must report all international transfers over $10,000

Answer

SWIFT messages must include a unique transaction hash

Answer

All payments must be processed within 24 hours

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

Field 59 (Beneficiary Customer)

Answer

Field 56A (Intermediary Institution)

Answer

Field 71A (Details of Charges)

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

Keep Your Credentials — a SWIFT security protocol

Answer

Key Yield Certificate — a trade finance instrument

Answer

Know Your Counterpart — a SWIFT gpi requirement

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

A database of sanctioned individuals and entities

Answer

A SWIFT tool for screening transactions against AML watchlists

Answer

A registry of all SWIFT BIC codes worldwide

Question 6

What does 'de-risking' mean in the correspondent banking context?

Accepted Answer

Banks terminating correspondent relationships with high-risk jurisdictions or clients to avoid AML exposure

Answer

Reducing SWIFT transaction fees through volume agreements

Answer

Migrating from MT to ISO 20022 messages to reduce errors

Answer

Applying encryption to reduce cybersecurity risk