Opening Deposit Accounts for Foreign-Born Persons

Presented by:
Mary Beth Guard and Ken Golliher

You think that the Bank Secrecy Act and the Internal Revenue Code have identical requirements for accounts opened for non U.S. persons? Think again.

Also, the type of identifying documents available vary according to the category of non U.S. person. We help you understand what each one should have.

WHAT?
Complying with complex and sometimes conflicting IRS and CIP requirements when opening a deposit account is a challenge.

However, when that deposit account is being opened by a non U.S. Person the process moves to the next level of complexity. Incorporating the meaning of terms like "matricula consular;" "visa;" "substantial presence test;" and even non "U.S. Person" (which CIP defines differently than the Internal Revenue Code) requires patience and precision.

WHY?
Whether the depositor is a college student or a permanent resident of the U.S., the bank has to know what the law requires. The bank must have the same amount of knowledge whether it has one or 1,000 non U.S. person customers.

Some non U.S. Persons are subject to IRS information reporting on Forms 1099INT or 1042S. Some are not. Compliance must incorporate a realization that what is acceptable as an identifying number for CIP purposes does not necessarily equate to an acceptable number for IRS information reporting. Knowing when a non U.S. Person should execute a W-9 or W8-BEN at account opening and knowing which form needs to be replaced periodically is mission critical.

Verifying identity, whether it is through documentary or non documentary means, is the next challenge. Can the bank reasonably require U.S. issued identification only or should it accommodate non U.S. identification? If non U.S. identification is accepted, how do you begin to determine authenticity? Is the bank required to establish that a non resident alien entered the country legally before it opens the account?

In some respects, the identification element is more complex than that regarding the identifying number - identification requirements are wholly a matter of the bank's discretion, but the Bank Secrecy Act requires you to employ methods of identity verification that allow you to form a reasonable belief you know the true identity of the customer. If you are using documentary verification on foreign individuals, you at least need to know the basics about the documentation that may be available and the expected characteristics of that documentation in order to allow you to form that reasonable belief about true identity.

PROGRAM CONTENT?

Identifying number requirements for CIP purposes

Correct TINs for IRS purposes

Classes of foreign individuals within the U.S. - understanding the differences

Visas and Visa waiver countries

Admission records for non U.S. persons

Identifying and listing acceptable identification documents in your CIP;

Security features on various ID documents that may be presented by a non U.S. person

The possibility of using non documentary verification

When is an ITIN acceptable

Acceptability of SSNs issued "for work purposes only"

TIN verification methods

The Real ID Act of 2005, its status, and its potential impact

Bank responsibility for filing SARs on receipt of fraudulent ID

This Webinar focuses on opening bank deposit accounts for non U.S. persons who are individuals. Thus, the only variety of W-8 discussed is the W8-BEN and the types of documentary verification that might be acceptable are limited to those used by individuals. The program does not cover reporting on portfolio interest or loans.

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• Complete presentation (including slides and audio)
• Written Materials
• Follow-up Q & A

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About the speakers: Mary Beth Guard
Mary Beth Guard currently serves as Executive Editor of BankersOnline.com and CEO of Glia Group, Inc., Mary Beth has had a long and distinguished career, graduating from law school in 1980. She has focused her work exclusively on the banking industry since 1984. Previously, Mary Beth served as EVP/General Counsel and COO for the Oklahoma Bankers Association, EVP of Specialized Services for Thomson Financial Publishing, and General Counsel for the Oklahoma State Banking Department. Mary Beth is on the advisory board for Bankers' Hotline and Compliance Action, as well as on the editorial board for ABA Bank Compliance magazine. She has presented training programs for virtually every major national financial industry association, as well as more than a dozen state bankers associations and a host of other organizations. In addition, Mary Beth has written more than a thousand banking-related articles and is a BOL Guru.

Ken Golliher
Ken is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. Prior to becoming a full time trainer, he was a community banker and then the General Counsel for a regional consulting firm for financial institutions. He has presented seminars in more than 25 states and has served as an instructor at compliance schools sponsored by the Illinois, Indiana, Iowa, Georgia, Kansas, Kentucky, Nebraska, Oklahoma, Pennsylvania and Texas bankers associations. Ken has also served as an instructor for both FDIC and OTS examiners at the agencies' week long schools.