Offshore: what will the Bank ask?

Every respected Bank should be interested in why the client wants to perform a particular action, to carry out a particular operation with money. This is especially important when it comes to some atypical cases. If the Bank employee does not understand the purpose of the procedure or it is beyond the standard, he must find out from the client all the incomprehensible points, in particular issues relating to the origin of funds. In some cases, the financial institution may ask for agreements, certificates, invoices or other officially certified papers confirming the client’s explanations.

Communication and information

The banking organization shall preserve all the information provided by the client that relates to their business mutual communication. If any data changes, the customer shall inform the Bank thereof. Regardless of how long the client’s business relationship with the Bank lasts, the institution must verify the correctness of the information provided by the client and the accuracy of the documents presented, as well as keep track of all business relations of the client.

Conditions that are set for the execution of monetary transactions

Before carrying out a transaction with money, the Bank must find out the identity of its client. In addition, Bank employees are required to check whether the transaction is responsible:

• nature of the client’s business activities;
• standard work with the Bank

If financial transactions do not meet these criteria, the Bank should check the source of funds involved in this process.

What lies under the phrase «money laundering»?

From the point of view of a banking institution, money-laundering is an act aimed at legitimizing funds or property obtained by criminal activity or concealing their appearance. Often such actions are committed by terrorists, thieves, drug dealers, smugglers, hackers, corrupt officials, tax plunderers and all characters associated with such personalities.

Legal conditions for opening accounts by an individual

In the process of opening an account and carrying out various kinds of transactions with money, the Bank will require the provision of personal documents with photos. This can be a passport, ID card or driver’s license.

Legal conditions for opening accounts by a legal entity

In addition to personal documents with photos from the representative of the legal entity will need a document that confirms the legality of its functions. This proof can serve as a constitutive documents or articles of Association, certificate from the Central registry, etc. the same requirement applies in the situation of representing some other entity. In the presented representative of the securities must be marked directions of activities of legal entities, management structure.

The real beneficiary is the beneficiary

Financial and credit organization must find out the person of the beneficiary. Usually it is a natural person in whose favor or in whose interests banking operations are carried out. Also, the beneficiary can be a natural person who controls the management bodies of the legal entity.

If the client is engaged in political activity

Foreign citizens who are involved in politics in the past or present should be closely monitored by the Bank. These are people who occupy important public positions (diplomats, members of Parliament, high military ranks, etc.), their closest family environment (brothers, sisters, spouses, etc.), as well as their main assistants.

If the customer refused to provide information or provided incorrect datа

If the required Bank information of the customer was not provided at all, were given not in full or the client-supplied data is not checked for accuracy, the Bank shall refuse the client in conducting financial transactions. In some cases, the business relationship with the client may be completely terminated.

If a banking organization disregards the legal provisions governing the prevention of money-laundering or financial support to terrorists, the special financial crime investigation Service may resort to sanctions against the Bank. At the same time, foreign countries will recommend their credit institutions to suspend all business relations with the Bank by the violator.

The control of banking organizations

Banks and their clientele are monitored by the financial crime investigation Service.

Laws on the financial supply of terrorist groups and prevention of money laundering

The relevant legislation currently in force in many countries of the world clearly defines when and what preventive measures banks are required to take in order to prevent money-laundering and the financing of terrorist organizations. The laws oblige banks to find out in some situations the identity of their customers, asking them all sorts of questions. Clients, in turn, should be comfortable with such an initiative, as it is aimed at preventing potential financial crimes.