Publication of the Wolfsberg Group Response to the CPMI Consultation on ISO 20022 Harmonisation Requirements for Cross-Border Payments

On 1 March 2023, the BIS’ CPMI released a consultative report on ISO 20022 harmonisation requirements aimed at improving cross-border payments, to which the Wolfsberg Group has provided comments, thereby addressing financial crime compliance risks in today’s complex and intermediated payment landscape.
Questions 2 & 3, 5 & 7, and 32: These questions address various aspects of ISO 20022 message types and payment transparency. The Group recommends that all parties in the payment flow must be identified in their respective fields, and that requirements for the use of cross-border codes in fragmented and aggregated payments must be considered carefully. The Group also notes that the desire for frictionless cross-border payments is difficult to reconcile with the real-time sanctions screening required of FIs/PSPs. Appropriate monitoring would be required to ensure that payment market participants are using the message formats correctly.
Question 25: The inclusion of uniformly structured data for all parties involved can assist in AML monitoring investigations, but it won’t improve cases of aggregated payments where the underlying party names are not visible to intermediaries. The implementation of ISO message formats in Swift is gradual, and it will take time for all payment market participants to learn and adapt to the new formats.
Question 26: The Group recognizes the potential benefit of using structured identifiers for transacting entities that are legal entities, but such identifiers do not assist in cases where natural persons are the transactors.
Question 27: The Group is updating its 2017 Payment Transparency Standard, and one area of focus is the use of terms such as bulk, batch, or bundle to denote a single payment that represents the aggregation of multiple underlying payments. The Group cautions against using the term „bulked“ in this context and suggests that the risk being highlighted is that of concatenated data.
Question 28: The use of consistently structured address data was encouraged in the Group’s 2017 Payment Transparency Standards. Correct usage of message formats can improve the efficiency of sanctions screening processes.
Question 29: Party name plus country and town name would be minimum requirements for sanctions screening, but it would not be sufficient for AML transaction monitoring. The Group recommends that not all address fields set out in Annex 2 have CPMI Data Model tags and that these be tagged for clarity on whether they are optional or not.
Question 30: The Group recommends that the minimum size of remittance information not be set to be the same as the maximum. The Group believes that the principles set out in its 2007 Statement on Payment Message Standards be reinforced to all market participants.
Question 31: Requiring parties in a payment chain to access data sources that are separate from the information contained on the face of the payment will introduce delay in processing. The Group recommends avoiding anything that compromises or impedes the ability for straight-through processing**.