BSA/AML Examiner School Case Study
Internal Use Only
Note: In the case of a private banking account for which a senior foreign political figure is a nominal or beneficial owner, the account officer should perform enhanced scrutiny of such account that will help the Bank detect and report transactions that may involve the proceeds of foreign corruption. • Determine the source(s) of funds deposited into a private banking account and the purpose and expected use of the account. The Bank must know: the current source of funds for the account; a description/history of the source of the customer's wealth; and the customer's estimated net worth, including financial statements. • Review the activity of the account to ensure that it is consistent with the information obtained about the client's source of funds and with the stated purpose and expected use of the account. This information is needed to guard against money laundering and to report any suspicious activity conducted to, from, or through a private banking account. • Nature of the customer and the customer's business. The source of the customer's wealth, the nature of the customer's business and the extent to which the customer's business history presents an increased risk for money laundering and terrorist financing. This factor is considered for private banking accounts opened and for Politically Exposed Persons (PEPs). • Provide the purpose and activity of the account. The size, purpose, types of accounts, anticipated activity of the account and the type of products and services used by the customer (i.e., domestic or international wires, cash deposits, ACH transactions, private banking services, etc.) • Customer's corporate structure. Document the type of corporate structure (i.e., IBCs, Shell companies (domestic or foreign), or PICs); the location of the private banking customer's domicile/home country and business (domestic or foreign). • Public information- Information known or reasonably available to the Bank about the private banking customer; if possible, the references or other information to confirm the reputation of the client. Enhanced Scrutiny of Private Banking Accounts for Senior Foreign Political Figures Enhanced Scrutiny of Private Banking Accounts for "senior foreign political figures will be risk-based. Reasonable steps to perform enhanced scrutiny may include conducting greater scrutiny of the customer's employment history and sources of funds, contacting branches of the U.S bank operating in the home country of the customer to obtain additional information about the customer and the political environment, or consulting publicly available information regarding the home country of the customer. Please refer to the "Politically Exposed Person" (PEP) for a detail description on Enhanced Due Diligence requirements. The opening of any PEP account must be approved by the BSA/OFAC Officer before the account is opened. If the BSA/OFAC Officer determines after the fact that an account is a PEP account, the risks are to be carefully evaluated and appropriate steps should be taken, including ongoing risk based monitoring of the PEP account to ensure the account is being used as anticipated. It is the policy of the Bank to refuse to open a private banking account, suspend transaction activity of the account, file a suspicious activity report, or close the account in the event that appropriate due diligence procedures cannot be performed. The BSA Officer must be contacted immediately. Note: If the BSA Department determines that your high risk customer is subject to expanded review and needs further enhance due diligence, the account officer will be notified promptly.
For Training Purposes Only
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