Summary of document history
The transfer of data across borders is essential to the functioning of the cross-border payments system.
Based on the positive feedback received during consultation, this report sets out final recommendations for promoting alignment and interoperability across data frameworks (i.e. the laws, rules, and regulatory requirements for collecting, storing and managing data) applicable to cross-border payments. The recommendations aim to mitigate unintended frictions that may pose significant challenges to improving the cost, speed, transparency and accessibility of cross-border payments. At the same time, they uphold the underlying objectives of data frameworks (such as preserving the security of transactions, meeting anti-money laundering and combating the financing of terrorism (AML/CFT) and sanctions objectives, and protecting the privacy of individuals).
To help ensure that the recommendations are taken forward in a coordinated manner, the FSB will establish a Forum on Cross-Border Payments Data bringing together a diverse set of public sector stakeholders relevant to cross-border payments, including payments, AML/CFT, sanctions, and data privacy and protection experts.
The recommendations to promote alignment and interoperability across data frameworks related to cross-border payments fall into four broad categories:
- Addressing uncertainty about how to balance regulatory and supervisory obligations
- Promoting the alignment and interoperability of regulatory and data requirements related to cross-border payments
- Mitigating restrictions on the flow of data related to payments across borders
- Reducing barriers to innovation
FSB Recommendations
Recommendation 1: The FSB, in collaboration with the OECD, FATF and the GPA, should establish a Forum for collaboration on policymaking, with a view to resolving data framework frictions and facilitating exchanges of ideas and analysis, on cross border payments and related data issues. The Forum would also include relevant stakeholders from international organisations (IOs), SSBs, data protection and privacy authorities (DPAs) and regulatory agencies. The Forum should develop channels for regular engagement with industry stakeholders involved in cross border payments.
Recommendation 2: Relevant authorities, international organisations and standard-setting bodies should work within the Forum to identify, map and address possible areas of divergence and inconsistency in data frameworks relevant to cross-border payments and facilitate discussion among authorities on how to make these requirements more consistent while meeting AML/CFT and sanctions objectives, preventing fraud, and protecting data privacy objectives. Forum participants should take into consideration successful examples from other areas. The Forum should also consider a process to ensure that new potentially emerging divergences and inconsistencies are addressed as they arise.
Recommendation 3: National authorities should encourage the adoption by market participants, including central banks and payment system operators, of the Bank for International Settlements’ Committee on Payments and Market Infrastructure (CPMI)’s harmonised ISO 20022 data requirements for cross-border payments.
Recommendation 4: To avoid the inconsistent application of cross-border payment-related data requirements for AML/CFT compliance, national authorities should implement FATF Recommendation 16 and provide clear and accessible guidance on any additional data required to comply with local AML/CFT regulations. They should also use applicable global data standards, where available.
Recommendation 5: Sanctions authorities should take steps to standardise the way sanctions lists are
formatted, shared and updated. The use of sufficient and standardised identifiers should be encouraged
to better facilitate identification, reduce false positives, and promote links between data sources.
Recommendation 6: National authorities should support the enhanced use of standardised global
identifiers, such as the Legal Entity Identifier (LEI), including by taking steps to emphasise that the use
of standardised global identifiers in cross-border payments is best practice.
Recommendation 7: Building on its ongoing evidence-based and multi-stakeholder work on crossborder data flows, the OECD, together with data privacy and protection authorities and relevant crossborder payments stakeholders, should explore different options to enable faster, less costly, more transparent and more accessible cross-border payment-related data flows while ensuring high levels of privacy protection.
Recommendation 8: Building on the work outlined in Recommendation 7, relevant authorities should adopt and enforce consistent standards in domestic privacy and data protection regimes applicable to payment processing and identify appropriate cross-border data transfer mechanisms.
Recommendation 9: National authorities should provide a clear and reasonable legal pathway for cross-border payments market participants to transmit across borders data related to payment processing, risk management, or fraud and financial crime prevention. Where applicable, national authorities should provide alternatives to requirements to use local computing facilities.
Recommendation 10: National authorities should establish clear and transparent mechanisms to allow cross-border payments market participants to share data with foreign regulatory and supervisory authorities, as appropriate. Cross-border payments market participants should ensure relevant regulatory and supervisory authorities have full and timely access to data in accordance with their respective mandates.
Recommendation 11: When designing their data-related policies, relevant authorities should consider potential impacts on consumers and cross-border payments market participants. In particular, jurisdictions should consider how data restrictive policies, including data localisation and data mirroring requirements, could affect the cost, speed, transparency and accessibility of cross-border payments.
Recommendation 12: National authorities and international standard setters should promote innovation that may offer solutions to data frictions in cross-border payments by taking steps to foster public-private sector partnerships, facilitate dialogue with innovators, create regulatory frameworks that support innovation, and share best practices with international counterparts.