Correspondent banking is a service that allows banks to access financial services in different jurisdictions through intermediary banks, known as correspondent banks. Correspondent banking can facilitate cross- border transactions, foreign exchange, and other financial activities for banks and their customers. However, correspondent banking also poses various risks, such as money laundering, terrorist financing, fraud, corruption, tax evasion, and sanctions evasion. Correspondent banks may have no direct relationship with the customers of the respondent banks, making it difficult to verify their identity and monitor their transactions.
Correspondent banks may also rely on the compliance programs of the respondent banks, which may not meet the standards of the correspondent banks' jurisdictions.
One of the risk factors that increases the risk for a correspondent bank is being a major service provider to money service businesses (MSBs). MSBs are entities that provide money transmission, currency exchange, check cashing, prepaid cards, and other similar services. MSBs are often considered high-risk customers, because they may serve as conduits for illicit funds, especially if they operate in jurisdictions with weak anti- money laundering regulations or oversight. MSBs may also have a large and diverse customer base, making it challenging to conduct customer due diligence and transaction monitoring. Therefore, correspondent banks that provide services to MSBs may face higher exposure to money laundering and other financial crimes, and may need to apply enhanced due diligence and risk mitigation measures.
References:
* Understanding Risk in Correspondent Banking
* GUIDANCE ON CORRESPONDENT BANKING SERVICES
* Correspondent Bank: Definition and How It Works
* Correspondent banking - why it's important to understand the risks
Reference: https://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-Correspondent-Banking- Services.pdf

Financial Intelligence Units (FIUs) are national agencies that collect, analyze, and disseminate information on suspicious or unusual financial activity, such as money laundering and terrorist financing, to relevant authorities. One of their main functions is to disseminate the results of their analysis to law enforcement agencies in a timely manner, so that they can initiate investigations or prosecutions. This is also one of the standards set by the Financial Action Task Force (FATF), the global body that sets the anti-money laundering and counter-terrorist financing (AML/CFT) policies and recommendations. The other options are not the primary responsibilities of FIUs, although they may perform them as part of their mandate or in cooperation with other agencies.
References:
* What are Financial Intelligence Units (FIUs)? | Dow Jones
* Financial Intelligence Units: An Overview - IMF
* Financial Intelligence Units - Egmont Group
* FATF Recommendation 29 - Financial Intelligence Units (page 17)
Reference: https://knowledgehub.transparency.org/assets/uploads/helpdesk/Financial-Intelligence- Units_Design-Mandate-Powers_2019_PR.pdf

The first valid step in the Mutual Legal Assistance Treaty (MLAT) international cooperation process is for the central authority of the requesting country to send a letter of request to the central authority of the other country. The letter of request should provide a summary of the facts and information required, the reasons for the request, and any specific legal or procedural requirements that need to be met. (CAMS Manual, 6th Edition, Page 233).