WHAT IS MT 202 COV PAYMENT????
New SWIFT Message Format went live on November 21, 2009. In October 2007 there was a recommendation (guidance) from the Basel Committee on Banking Supervision in reference to MT COV 202. Wolfsberg Group and the Clearinghouse issued the Messaging Standards to enhance the transparency of payment messages.
Banks are required to implement enhancements to their monitoring processes to include the additional information available in the MT COV 202.
Banks must implement appropriate screening methodologies against new information, taking into consideration applicable regulatory requirements and prohibition (generally limited to economic embargoes or sanctions, and lists specific by relevant governmental authorizes.)
A Little MT 202 COV Background
Due to the design of the payments infrastructure, when cover payments are used, not all payment information available to the originator’s bank is currently communicated to the intermediary bank(s) involved in making payments. The payment message format used for cover payments, the MT 202, which is sent to intermediary banks, did not required the inclusion of originator and beneficiary information that is contained in the underlying MT 103 (which is sent to the beneficiary’s bank, but not to the intermediary banks when the cover payment is used). As a result, the intermediary banks receiving the MT 202 would not receive the originator and beneficiary information.
Reflecting a consensus to facilitate greater transparency and to assist financial institutions in their anti-money laundering and sanctions compliance efforts, SWIFT created a variant of the MT 202. This variant, the MT 202 COV, provides for replication of all information contained in certain fields (i.e. fields containing originator and beneficiary information) of the MT 103 and is to be used for cover payments.