While strongly supporting FATF’s principle of “same activity, same risk, same rules,” TCH identified a number of issues with FATF’s proposed changes to Recommendation 16 (Payment Transparency).  TCH noted that many of the concerns FATF has raised regarding new payment models can be addressed through consistent application of existing Customer Due Diligence and payment transparency requirements to bank and non-bank financial institutions that engage in cross-border payments.  In particular, TCH (i) believes the data privacy and security risks of including additional originator and beneficiary information in cross-border payments outweighs their financial crime benefit; (ii) strongly opposes the proposed beneficiary alignment requirement; (iii) suggests that additional work is needed to better define the elements of ISO 20022 messages for financial crimes purposes; (iv) thinks that the “payment chain” for purposes of R.16 begins with the financial institution that is instructed by an originator to pay a beneficiary in another country; and (v) does not support the proposed change to the net settlement exemption.

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