Correspondentbank

In plain words

A correspondent bank is an intermediary bank through which your bank makes payments to other countries and in other currencies. One bank does not hold direct accounts with every bank in the world, so transfers go along a chain: your bank — the correspondent — the recipient’s bank. It is invisible to you, but that is exactly where money often gets stuck.

This is especially true of dollar payments: almost all of them pass at some point through American correspondent banks, and so through US compliance and FATCA and sanctions rules. Even if neither the sender nor the recipient is in the US, the dollar “enters” the American system, and the correspondent may hold or return a payment if it sees a sanctions or reputational risk.

The conclusion for the client: the payment route matters. A transfer may be lawful but get stuck at a correspondent because of the country, the wording of the payment reference or a link to sanctions. That is why large international payments are planned in advance — taking into account the currency, the chain of banks and how compliance will see them at each link.

Where the correspondent matters

How the chain works

How to make a payment without it being blocked

1. 01Assess the route and currency
2. 02Prepare the payment reference and documents
3. 03Send the payment
4. 04Passing through the correspondents
5. 05The money reaches the recipient

What you need to know

• International payments go through intermediary banks
• Dollar payments pass through US banks
• The correspondent applies US compliance and sanctions
• Even a “local” transfer can get stuck because of the dollar
• The payment route matters

Common mistakes

• ✕Not taking into account that the dollar goes through US compliance
• ✕An unclear or risky payment reference
• ✕Sending from an “awkward” country without preparation
• ✕Not preparing documents on the origin of the money
• ✕Ignoring sanctions links along the chain

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