Why do banks go through all the know-your-customer (KYC) process if not to identify the beneficial owner of every account? If they receive a transfer via fraud, then they either get it clawed back, have to pay it back, and/or get identified to law enforcement. If the last bank in the chain doesn't want to play by the rules, then other banks shouldn't transfer into them, or that bank itself should be held liable.

This is more or less how people expect things to work today ....

In the case of some knowing or blindfully unknowing money mule in the chain or at the end of the chain, the intermediary or final banks may not be at fault. The bank could have followed KYC procedures in that somebody with that name actually existed who controlled the account.

The money mule themselves is almost certainly insolvent to pay the damages. Currencies can also change by the money mule (either to a different fiat currency or crypto), putting the ultimate link completely out of reach of the originating country.

If intermediary banks are deputized and become liable in a no-fault sense, then legitimate transfers out become very difficult. How does a bank prove a negative for where the funds come from? De-banking has already been a problem for a process-based AML regime.