§ 103.193 Special measures against Banco Delta Asia. Effective 4/18/2007
(a) Definitions. For purposes of this section:
(1) Banco Delta Asia means all branches, offices, and subsidiaries of Banco Delta
Asia operating in any jurisdiction, including its subsidiaries Delta Asia Credit Limited
and Delta Asia Insurance Limited.
(2) Correspondent account has the same meaning as provided in
§103.175( d)(1 )(ii).
(3) Covered financial institution includes:
(i) An insured bank (as defined in section 3(h) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(h)));
(ii) A commercial bank;
(iii) An agency or branch of a foreign bank in the United States;
(iv) A federally insured credit union;
(v) A savings association;
(vi) A corporation acting under section 25A of the Federal Reserve Act (12
U.S.C. 611 et seq.);
(vii) A trust bank or trust company that is federally regulated and is subject to an
anti-money laundering program requirement;
(viii) A broker or dealer in securities registered, or required to be registered, with
the US. Securities and Exchange Commission under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.), except persons who register pursuant to section
l5(b )(11) of the Securities Exchange Act of 1934;
(ix) A futures commission merchant or an introducing broker registered, or
required to register, with the Commodity Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1 et seq.), except persons who register pursuant to
section 4(f)(a)(2) of the Commodity Exchange Act; and
(x) A mutual fund, which means an investment company (as defined in section
3(a)(1) of the Investment Company Act of 1940("Investment Company Act") (15
U.S.C. 80a-3(a)(1))) that is an open-end company (as defined in section 5(a)(1) of the
Investment Company Act (15 U.S.C. 80a-5(a)(I))) and that is registered, or is required to
register, with the US. Securities and Exchange Commission pursuant to the Investment
Company Act.
(4) Subsidiary means a company of which more than 50 percent of the voting
stock or analogous equity interest is owned by another company.
(b) Requirements for covered financial institutions-
(1) Prohibition on direct use
of correspondent accounts. A covered financial institution shall terminate any
correspondent account that is established, maintained, administered, or managed in the
United States for, or on behalf of, Banco Delta Asia.
(2) Due diligence of correspondent accounts to prohibit indirect use.
(i) A covered financial institution shall apply due diligence to its correspondent
accounts that is reasonably designed to guard against their indirect use by Banco Delta
Asia. At a minimum, that due diligence must include:
(A) Notifying correspondent accountholders the correspondent account may not
be used to provide Banco Delta Asia with access to the covered financial institution; and
(B) Taking reasonable steps to identify any indirect use of its correspondent
accounts by Banco Delta Asia, to the extent that such indirect use can be determined
from transactional records maintained in the covered financial institution's normal
course of business.
(ii) A covered financial institution shall take a risk-based approach when deciding
what, if any, additional due diligence measures it should adopt to guard against the
indirect use of its correspondent accounts by Banco Delta Asia.
(iii) A covered financial institution that obtains knowledge that a correspondent
account is being used by the foreign bank to provide indirect access to Banco Delta Asia
shall take all appropriate steps to prevent such indirect access, including, where
necessary, terminating the correspondent account.
(iv) A covered financial institution required to terminate a correspondent account
pursuant to paragraph (b)(2)(iii) of this section:
(A) Should do so within a commercially reasonable time, and should not permit
the foreign bank to establish any new positions or execute any transaction through such
correspondent account, other than those necessary to close the correspondent account; and
(B) May reestablish a correspondent account closed pursuant to this paragraph if
it determines that the correspondent account will not be used to provide banking services
indirectly to Banco Delta Asia.
(3) Recordkeeping and reporting.
(i) A covered financial institution is required to
document its compliance with the notice requirement set forth in paragraph (b)(2)(i)(A)
of this section.
(ii) Nothing in this section shall require a covered financial institution to report
any information not otherwise required to be reported by law or regulation.
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