Compliance control in a foreign bank: what is important to know

Compliance control in a foreign bank: what is important to know

Only after passing a compliance check at a foreign bank is it possible to open an account. To understand what it is, how the check is arranged, and how to pass it quickly, contact our experts at IT-OFFSHORE. We can help you find answers to your questions.

What does the identification process involve

After most countries of the world have taken a course towards de-offshorization, anti-money laundering organizations have developed rules that have changed the way financial institutions operate.

Identification of the user and passing the compliance control in a foreign bank have become an important step when starting the bank. The verification procedure helps to make sure that the potential user of the bank's services has a positive reputation, the funds are obtained legally and available to him/her, and he/she plans to perform only clear and transparent operations.

Compliance with KYC rules, which aim to ensure that the bank knows its customer, is very important to effectively combat money laundering. Banking organizations are responsible for complying with these conditions. Every mistake made by a financial institution can result in sanctions and the loss of its license.

Nuances of passing control

In order to open an account with any bank, local or foreign, it is required to undergo an identification procedure. To do this, a person needs to provide some information about himself/herself.

These include last name, first name and father's name, date of birth, citizenship, information from the identification document and the place of residence. Documentation requirements may vary, depending on the bank. Some financial institutions may additionally require copies of your passport, documentation confirming the place of incorporation, and the legality of the origin of the capital.

Passing a company check is much more difficult. Before opening an account with a foreign bank, the actual status of the company is determined, the legality of finances, the identity of the director is checked, and all corporate documents are examined. What will need to be provided:

  • Articles of Incorporation and registration information;
  • Proof of business activity;
  • Corporate account information.

Other data must be provided if requested by the financial institution. It is important to fill out all applications and forms correctly, as opening an account can be denied if there are mistakes.

Possible difficulties

Usually suspicious activity when opening an account is detected abroad. Some bank clients believe that it is enough to pass the preliminary check and create an account; after that there will be no control over the operations. This opinion is erroneous and the bank checks all of its customers for compliance with their internal requirements.

Suspicious transactions include large transactions without confirmation of the source of money, performing transactions for no reason, and some types of transfers. In such a case, there is a risk of the account being blocked.

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