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Assume that we're a reimbursing bank. Actually we only received MT740 from issuing bank authorized us to reimburse up on receipt claim reimburse from to negotiating bank. Furthermore, MT740 stated only validity date of the credit, LC number, Tenor,.... without specific the goods or docs related to the credit.
My question is: How could we know does our reimbursement not relevant to Money Laundering Activity?
Pls kindly commend!!!!
Regards,

Hi Pal,

If you have an account with l/c issuing Bank, may be, you have requested the bank for AML Questionnaire and other documents required by your Compliance Dept. So you can assume that the issuing bank is acting within these rules. If you have suspects you have to stop working with this bank.
Other comments appreciated
Ciao

Hello Friend,

All we have is only the reimbursement authorisation... and of course you are indeed right... there is a high possibility of ML happening here.

But, since we have the authorisation from issuing bank and in case we receive a claim from the claiming bank, we can very well pay off the claiming bank by debiting issuing bank's account. After all, it's the issuing bank and the claiming bank who deals with the documents and they are the ones who are exposed to higher risk.

Reimbursing bank is jus an intermediary... they can't be held responsible for ANY such incidents.

Hope this clarifies... other comments awaited

Cheers!!!

Dear,
According to article 2 (b) of URR-725:

b. "Reimbursing bank" means the bank instructed or authorized to provide reimbursement pursuant to a reimbursement authorization issued by the issuing bank.

.
hence reimbursement bank can act upon receipt of authorization from the issuing bank.
now we have to consider what is the procedure that issuing bank has to follow:
according to sub-article 6(a)

a. All reimbursement authorizations and reimbursement amendments must be issued in the form of an authenticated teletransmission or a signed letter.

.
As you said you are acting on the basis of MT740[an authenticated SWIFT message] from the issuing bank and you are not dealing with the documentary credit... as a reimbursing bank you need not to know "reimbursement Vs Money Laundering issue" this is concern of the issuing bank and claming bank.
regards
nesar

REIMBURESING BANK ONLY ACTED ACCORDING TO ISSUING BANK'S INSTRUCTION