Foreign Bank Correspondent Account Requirements under the USA PATRIOT Act
Question
A foreign bank operating under an offshore license wants to open a correspondent account with a United States (U.S.) bank. The foreign bank plans to provide payable through account services to some of its customers.
What must the foreign bank provide to the U.S. bank under the USA PATRIOT Act?
Answers
Explanations
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A. B. C. D.A
https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/CBDDQ-Capacity-Building/Wolfsberg%27s_CBDDQ_Capacity_Building_Guidance_Final%20V1.1.pdf
Under the USA PATRIOT Act, the foreign bank must provide certain information to the U.S. bank when opening a correspondent account to prevent money laundering and terrorist financing. Specifically, the foreign bank must provide information that is reasonably necessary for the U.S. bank to assess the money laundering risk associated with the correspondent account.
In the given scenario, the foreign bank intends to provide payable through account services to its customers through the correspondent account with the U.S. bank. A payable through account is a type of account that allows a customer of a foreign financial institution to receive deposits and make payments in a country where the foreign financial institution does not have a physical presence.
Out of the given options, the following information must be provided by the foreign bank to the U.S. bank:
A. A list of politically exposed persons who are owners of the correspondent bank This information is not directly relevant to assessing the money laundering risk associated with the payable through account service, and therefore is not required under the USA PATRIOT Act.
B. A list of account holders at the financial institution who will use the payable through account This information is necessary for the U.S. bank to assess the money laundering risk associated with the correspondent account. The U.S. bank must verify the identities of the account holders and conduct ongoing monitoring of the account activity to detect suspicious transactions.
C. The person in the United States who can receive service of legal process for the correspondent bank This information is not directly relevant to assessing the money laundering risk associated with the payable through account service, and therefore is not required under the USA PATRIOT Act.
D. A list of anti-money laundering training records for the financial institution employees monitoring payable through account transactions While it is important for the employees monitoring payable through account transactions to receive anti-money laundering training, the USA PATRIOT Act does not require the foreign bank to provide this information to the U.S. bank.
Therefore, the correct answer is B: A list of account holders at the financial institution who will use the payable through account.
