FIGURE F.1
Serial/Sequential and Cover Payment Methods Serial/Sequential Payment Chain
Beneficiary Customer
Originating Customer
Originating Bank
Originating Bank’s Correspondent Bank
MT 103
Location: Country A
MT 103
Beneficiary Bank’s Correspondent Bank
Location: Country B
MT 103
Beneficiary Bank
Location: Country C
Cover Payment Chain Originating Customer
Beneficiary Customer
MT 103
Originating Bank
MT 202
Originating Bank’s Correspondent Bank
Location: Country A
MT 202
a
Beneficiary Bank Beneficiary Bank’s Correspondent Bank
Location: Country B
MT 9xx
Location: Country C
Source: Adapted from Basel Committee on Banking Supervision, “Due Diligence and Transparency Regarding Cover Payment Messages Related to Cross-Border Wire Transfers” (May 2009), p. 3. a. Alternatively, this could be a local clearing system.
103 or to determine the purpose of the transfer (that is, cover payment or interbank settlement). For this reason, it is important that an investigator obtains all incoming and outgoing MT 103s related to a cover payment. New Cover Payment Standards (MT 202 COV) The Financial Action Task Force (FATF) has addressed only direct sequential payments (or SWIFT MT 103s) in which (as contemplated by FATF Special Recommendation VII on wire transfers) information sent to a beneficiary institution travels with the wire through the various intermediaries. The FATF has not dealt with cover payment scenarios in which payment information available to the originating financial institution is not communicated to correspondent banks involved in making the payments. As a 210
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Asset Recovery Handbook