These are intended to provide a framework enabling countries to combat money laundering and terrorist financing in a consistent way. Recommendation 16 applies to cross-border wire transfers and domestic wire transfers ,including serial payments, and cover payments. While these rules focus on originator information, Recommendation 16 requires both originator and beneficiary information to be included in some financial messages for wire transfers. The customer identification number refers to a number which uniquely identifies the originator to the originating financial institution and is a different number from the unique transaction reference number referred to in paragraph 7. As Tannebaum comments, “Many banks operate under a triage-based approach, so wherever the regulator or auditors are shouting the loudest tends to be where resources are directed.”. ACAMS is the largest membership organization dedicated to enhancing the knowledge and skills of financial crime detection and prevention professionals worldwide. A further obstacle is the inconsistencies that may arise between different bank approaches to capturing data from customers. “The only way to achieve this is to make sure that the data is of sufficiently high quality so that automated solutions can do their work,” says Stephen Lindsay, head of standards at SWIFT. 15. Meanwhile, under Recommendation 16 the obligations for banks to monitor data are made much clearer. Due to the potential terrorist financing threat posed by small wire transfers, countries should minimise thresholds taking into account the risk of driving transactions underground and the importance of financial inclusion. A beneficiary financial institution should have effective risk-based policies and procedures for determining: (i) when to execute, reject, or suspend a wire transfer lacking required originator or required beneficiary information; and (ii) the appropriate follow-up action. (b) Countries may, nevertheless, require that incoming cross-border wire transfers below the threshold contain required and accurate originator information. 13. The EU and Singapore have already issued regulations that reflect Recommendation 16, and other FATF members—including the U.S.—are expected to follow. “For one thing, there have been limited penalties related to travel rule-like requirements, even though there has been legislation in place for a number of countries mandating certain information to travel with the transaction. Originator refers to the account holder who allows the wire transfer from that account, or where there is no account, the natural or legal person that places the order with the ordering financial institution to perform the wire transfer. Straight-through processing refers to payment transactions that are conducted electronically without the need for manual intervention. Compliance with Recommendation 16 is one of the issues being discussed by the Payments Markets Practice Group (PMPG), which works to improve market practices in conjunction with the correct use of standards. There is more to data quality than achieving compliance. 3. Money or value transfer service (MVTS) providers should be required to comply with all of the relevant requirements of Recommendation 16 in the countries in which they operate, directly or through their agents. However, when a credit or debit or prepaid card is used as a payment system to effect a person-to-person wire transfer, the transaction is covered by Recommendation 16, and the necessary information should be included in the message. 4. Recommendation 16 applies to both cross-border and domestic wire transfers. Many FATF member countries—and the EU (which is also a FATF member)—are in the process of incorporating the FATF recommendations into their own regulations and requirements. Recommendation 16 applies to both cross-border and domestic wire transfers. Banks are expected to take a risk-based approach regarding missing originator and beneficiary information. What is FATF 16? 10. Serial Payment refers to a direct sequential chain of payment where the wire transfer and accompanying payment message travel together from the ordering financial institution to the beneficiary financial institution directly or through one or more intermediary financial institutions (e.g. Financial institutions (FIs) should include required originator/beneficiary information on wire transfers and related messages, and that information should remain with the wire transfer or related message throughout the payment chain 2. This could include talking to the relevant bank and encouraging it to improve its standards. Banks will need to ensure that the required data is provided and take the necessary steps if it is not. In this latter case, the ordering financial institution need only include the account number. 9. (c) to ordering, intermediary and beneficiary financial institutions to facilitate the identification and reporting of suspicious transactions, and to implement the requirements to take freezing action and comply with prohibitions from conducting transactions with designated persons and entities, as per the obligations set out in the relevant United Nations Security Council resolutions, such as resolution 1267 (1999) and its successor resolutions, and resolution 1373 (2001) relating to the prevention and suppression of terrorism and terrorist financing. It is not the intention of the FATF to impose rigid standards or to mandate a single operating process that would negatively affect the payment system. Countries should ensure that, in the context of processing wire transfers, financial institutions take freezing action and should prohibit conducting transactions with designated persons and entities, as per the obligations set out in the relevant United Nations Security Council resolutions, such as resolution 1267 (1999) and its successor resolutions, and resolution 1373(2001), relating to the prevention and suppression of terrorism and terrorist financing. While complying with Recommendation 16 is the main catalyst for banks to tackle this area, it is also important to note that improving data quality brings additional benefits, such as the more effective use of sanctions-related systems. Required is used to describe a situation in which all elements of required information are present. For cross-border wire transfers, financial institutions processing an intermediary element of such chains of wire transfers should ensure that all originator and beneficiary information that accompanies a wire transfer is retained with it. Collaboration can play an important part in improving consistency across the industry. 17. Qualifying wire transfers means a cross-border wire transfer above any applicable threshold as described in paragraph 5 of the Interpretive Note to Recommendation 16. Transfers should also include the originator’s name, account number and address, or other information to aid identification, such as their national identity number, customer identification number, and date and place of birth. The customer identification number must refer to a record held by the originating financial institution which contains at least one of the following: the customer address, a national identity number, or a date and place of birth, transaction reference number, provided that this number or identifier will permit the transaction to be traced back to the originator or the beneficiary.