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Correspondent Banking: A Gateway for Money Laundering
Senate Committee on Governmental Affairs Permanent Subcommittee on Investigations
Senate Committee on Governmental Affairs
Permanent Subcommittee on Investigations
Abstract
The Senate Committee on Governmental Affairs' Permanent Subcommittee on Investigations published a Minority Staff report investigating correspondent bank accounts from high-risk foreign banks in the United States that facilitated criminal activity and money laundering in federal financial institutions. They found that the current financial system fails to adequately screen and monitor foreign banks as client as they rely on manual reviews of account activity. The Subcommittee attributed these failures to two major problems: a failure of U.S. banks to ask the extent to which foreign bank clients are allowing other foreign banks to use U.S. accounts and the distinction made in due diligence practices made between foreign banks that have few assets and no credit relationship vs foreign banks that seek or obtain credit from U.S. banks. Ultimately the Subcommittee determined that these abuses of correspondent bank accounts undermine the financial system and burdens U.S. taxpayers and consumers.
Date
2001-02-05
Document Type
Senate Minority Staff Report
Serial Number
107-1.Sprt
Document Length
309 pages
Congress
107
Relation
DOI
Keywords
Staff Reports
PAP Major Code
12: Law, Crime, and Family Issues
PAP Minor Code
1201: Executive Branch Agencies Dealing with Law and Crime