In AML frameworks, an Information Request specifically denotes the authority granted to FIUs to obtain relevant customer, transaction, or business relationship data from reporting entities like banks, lawyers, and real estate agents. Unlike voluntary disclosures, RFIs are mandatory and purpose-driven, limited to information necessary for AML and counter-terrorist financing (CTF) tasks. German Geldwäschegesetz (GwG) Section 30(3) exemplifies this by allowing the FIU to request data without prior suspicious transaction reports, ensuring timely intelligence for investigations.
Purpose and Regulatory Basis
Information Requests serve as a proactive tool for FIUs to bridge intelligence gaps, analyze financial flows, and disrupt illicit activities before they escalate. They matter because they enhance supervisory oversight, enable cross-border cooperation, and strengthen the global AML ecosystem against evolving threats like trade-based laundering. Key regulations include FATF Recommendation 29, which mandates FIU access to timely information from obliged entities; the USA PATRIOT Act (Sections 311-319), expanding FinCEN’s powers for subpoenas on correspondent accounts; and EU AML Directives (4th/5th AMLD, updated in 6th AMLD), granting FIUs direct access independent of prior reports.
When and How It Applies
RFIs apply when FIUs identify potential risks during transaction analysis, intelligence sharing, or proactive inquiries, triggered by red flags like sudden high-value transfers, dormant account activations, or links to high-risk jurisdictions. Real-world use cases include a bank receiving an FIU query on a customer’s cross-border wires inconsistent with their profile, or post-SAR follow-ups for deeper source-of-funds verification. Institutions must respond within reasonable deadlines, typically days to weeks, via secure channels, documenting the process to avoid tipping-off violations.
Types or Variants
AML Information Requests vary by issuer and scope: FIU RFIs for intelligence (e.g., customer due diligence data under EU AMLD); regulator/supervisor RFIs for compliance audits (e.g., BaFin under GwG); and internal/transaction monitoring RFIs between correspondent banks per Wolfsberg Group guidance, focusing on payment transparency without sanctions implications. Other variants include ad-hoc queries for PEPs or high-risk entities, and operational RFIs suspending transactions under 6th AMLD powers.
Procedures and Implementation
Financial institutions must designate independent AML officers with authority to respond without management interference, per GwG Section 7(5). Steps include: (1) Receive and log the RFI securely; (2) Assess proportionality and gather data via KYC/ transaction systems; (3) Verify internally without customer notification (tipping-off ban); (4) Respond accurately within deadlines; (5) Retain records for audits. Implement automated case management tools, staff training, and escalation protocols to ensure efficiency.
Impact on Customers
Customers face temporary account restrictions, such as transaction holds, during RFI fulfillment, but retain rights to data access under GDPR (post-retention periods) and proportionality challenges. Institutions cannot terminate relationships solely based on RFIs, avoiding discriminatory actions. Transparent communication post-resolution maintains trust, though ongoing monitoring may apply for high-risk clients.
Duration, Review, and Resolution
RFIs demand responses within “reasonable” timeframes, often 5-30 days depending on jurisdiction, with extensions rare but possible for complex queries. Institutions review internally for completeness, while FIUs assess and may follow up; resolution occurs upon acknowledgment or further action like SARs (filed within 30-60 days of suspicion). Ongoing obligations include monitoring resolved cases for new risks.
Reporting and Compliance Duties
Institutions must document all RFI interactions, integrating into SAR processes if suspicions arise, with AML officers enjoying legal protections for good-faith responses. Non-compliance incurs penalties: civil fines up to $500,000+, criminal imprisonment (up to 10 years under BSA/PATRIOT Act), or license revocation. EU 6th AMLD strengthens FIU enforcement via deadlines and joint analyses.
Related AML Terms
Information Requests interconnect with Customer Due Diligence (CDD) for data sourcing, Suspicious Activity Reports (SARs) as potential outcomes, and Know Your Customer (KYC) for baseline verification. They support Enhanced Due Diligence (EDD) for PEPs and link to sanctions screening, where RFIs clarify false positives.
Challenges and Best Practices
Common issues include resource strain from high RFI volumes, data privacy conflicts (GDPR vs. AML retention), and inaccurate responses risking penalties. Best practices: Deploy AI-driven automation for triage, standardize templates per Wolfsberg guidance, conduct regular simulations, and foster FIU relationships for clarifications. Risk-based prioritization ensures proportionality.
Recent Developments
The EU AML Package (2024), including AMLA Regulation effective 2027, centralizes FIU coordination with deadlines for cross-border RFIs and AI-enhanced analytics. FATF updates emphasize tech integration; 2025 trends feature agentic AI for scalable monitoring and AMLA’s direct supervision of high-risk firms.
Information Requests remain indispensable for robust AML defenses, balancing enforcement with compliance efficiency.