BSA/AML Examiner Training Series 2

31 CFR Chapter X – Financial Crimes Enforcement Network (Continued)

Code

Maintaining a correspondent account for a foreign shell bank Section 1010.630(a)(1)(i) of the Treasury Department’s Bank Secrecy Act regulations prohibits a covered financial institution from establishing, maintaining, administering, or managing a correspondent account in the U.S., for, or on behalf of, a foreign shell bank. Failure to take reasonable steps to prohibit banking services to a foreign shell bank Section 1010.630(a)(1)(ii) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution to take reasonable steps to ensure that any correspondent account established, maintained, administered, or managed in the U.S. for a foreign financial institution is not being used by the foreign financial institution to provide banking services to a foreign shell bank. Failure to maintain records identifying the owners of a foreign financial institution Section 1010.630(a)(2)(i) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution that maintains a correspondent account in the U.S. for a foreign financial institution whose shares are not publicly traded, to maintain records in the U.S. identifying the owners of the foreign financial institution. No record of person willing to accept service of legal process for foreign financial institution Section 1010.630(a)(2)(i) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution that maintains a correspondent account in the U.S. for a foreign financial institution, to maintain the name and street address of a person who resides in the U.S., and is authorized and has agreed to be an agent to accept service of legal process for records of the foreign correspondent account. Failure to take steps to correct information relied upon by covered institution Section 1010.630(c) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution to take steps specified in this Section if at any time it knows, suspects, or has reason to suspect, that any information contained in a certification or recertification provided by a foreign financial institution, or otherwise relied upon by the covered institution for purposes of this Section, is no longer correct. Failure to close foreign correspondent account Section 1010.630(d) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution to close all correspondent accounts of a foreign financial institution within a commercially reasonable time if the covered financial institution has not obtained, from the foreign financial institution or otherwise, information required by this Section. This Section also prohibits the covered financial institution from allowing the foreign financial institution to establish any new positions or execute any transaction through any such account, other than transactions necessary to close the account.

73,000

73,001

73,002

73,003

73,004

73,005

Revised 5/3/2023

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