Sanctions and Compliance Domains specify that correspondent banking relationships require a comprehensive assessment of the respondent bank’s sanctions risk exposure. Relevant factors include:
• Licensing authorities – Banks licensed in jurisdictions with weak sanctions controls, inadequate supervision, or misaligned regulatory frameworks pose heightened risk. Regulatory oversight directly influences sanctions compliance effectiveness.
• Location of operations – Geographies influence exposure to sanctioned countries, transshipment risks, proliferation financing threats, and proximity to high-risk jurisdictions. Geographic expansion may introduce new sanctions obligations and monitoring requirements.
• Products and services offered – Certain products (e.g., trade finance, cross-border payments, payable-through accounts) carry inherently higher sanctions risk. As respondent banks expand their service offerings, the correspondent institution must reassess associated risks.
The registration number is not relevant to sanctions exposure. Bank representatives may factor into KYC but are not core sanctions-risk elements. The respondent’s customers’ business activity is considered indirectly through the respondent bank’s controls and risk profile, but primary assessment focuses on the bank’s licensing, geography, and product set.
[References:, Sanctions risk assessment expectations for correspondent banking relationships., Consideration of licensing, geographic exposure, and product/service risk., Regulatory requirements for understanding respondent bank activities and oversight., , ]
