The vice president of the foreign correspondent banking department at a large United States bank has been notified that a foreign bank with an offshore license wants to open a correspondent account.
Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.)
Click on the arrows to vote for the correct answer
A. B. C. D.CD
Under the USA PATRIOT Act, it is mandatory for US banks to conduct due diligence on their foreign correspondent banking relationships to ensure that they are not being used for money laundering or terrorist financing purposes. When a foreign bank with an offshore license seeks to open a correspondent account, the vice president of the foreign correspondent banking department at the US bank must acquire certain information as part of this due diligence process.
Two things that the vice president must acquire under the USA PATRIOT Act are:
Information relating to the foreign bank's anti-money laundering (AML) program: The vice president must obtain information about the AML program of the foreign bank to ensure that it is in compliance with international AML standards and regulations. This information will help the US bank assess the level of risk associated with the correspondent banking relationship and take appropriate measures to mitigate that risk.
The identity of 10% owners of the correspondent bank, unless it is publicly traded: The vice president must obtain information about the ownership structure of the foreign correspondent bank, including the identity of any individuals or entities that own 10% or more of the bank's equity. If the correspondent bank is publicly traded, this information may be readily available. However, if it is not publicly traded, the US bank must obtain this information to ensure that it is not inadvertently facilitating money laundering or terrorist financing by dealing with individuals or entities that have questionable backgrounds.
It is important to note that while options A and B may be useful in obtaining a broader understanding of the correspondent bank's business, they are not explicitly required under the USA PATRIOT Act. Therefore, options C and D are the correct answers to this question.