Is this a rumor or is it true. I was told that our wire transfers must include the beneficiarie address, and we must comply by October 1, 2003. Does anyone have any information about this.

Thanks

You might want to go back to the person who gave you this information and ask for a clarification. They may be confused about what CIP covers.

Our correspondent bank that we use for foreign wires requires us to supply the street address of the beneficiary. They always have.

We just completed a BSA review by a CPA firm and we were told to get the beneficiaries addresses.

for both domestic and international wires?

As with all things, when you question the accuracy of a statement made by a regulator, examiner, auditor, accountant, attorney, or your mother-in-law, it's always OK to ask them to provide the source of their opinion.

Well, OK, maybe not your mother-in-law.

In my notes from the NRCC OFAC session (Laurie A. Bender, Senior Special AML Examiner, FRB), I wrote "Banks will be expected to 'drill down' for OFAC - trust beneficiaries, memo lines on wires, etc." I can't remember exactly what she said, and I don't think it's "required," just a warning of what's to come. Maybe that's what your source is talking about. I don't know anything about a 10/1 deadline - other than CIP.

The requirement to obtain the address of a wire beneficiary is required by long existing BSA regulatory requirements, not to CIP requirements (which is primary geared to establishing customer identity. The wire transfer rules and/or examination procedures state that an originating bank must obtain and retain the following information regarding each payment order of $3000 or more: (a) the name and address of the originator, (b) the amount of the payment order, (c) the execution date of the payment order, (d) any payment instructions received from the originator with the payment order, and (e) the identity of the beneficiary’s bank. An originating bank must also receive with the payment order as many of the following items as are received with the payment order: (f) the name and address of the beneficiary, (g) the account number of the beneficiary, and (h) any other specific identifier of the beneficiary. Only one of the items of (f), (g) and (h) is required if an institution has not yet converted to the expanded Fedwire format. If not yet converted, a bank is encouraged to include all of the information contained in (f), (g) and (h). Further, Commentary to the 1995 amendment to Bank Secrecy Act regulations relating to wire transfers expresses that ‘the originator’s bank is encouraged not only to require its customers to provide beneficiary information but also to perform an edit to ensure that information is contained in the beneficiary’s file’. Therefore, I suggest that a bank establishes a monitoring function in the wire room to assure that the beneficiary information is recorded by the retail staff that receives the wire request from the customer.

Patrick T. Hubbs, CRCM, CBCO

Pat,
Some of those posting above were probably already familiar with 31CFR 103.33 (e)(1)(A –E) when they responded. Those paragraphs list the information which the bank "shall obtain and retain" in connection with a covered transfer. Those paragraphs do not mention the beneficiary's name and address. The first time a requirement to keep a beneficiary's address is mentioned is in paragraph F:

As many of the following items as are received with the payment order:
(1) The name and address of the beneficiary;
(2) The account number of the beneficiary; and
(3) Any other specific identifier of the beneficiary.


Please note the regulation mentions keeping as many of the items "as are received." If the bank receives the information, it is required to keep it. However, it is clearly not required to obtain it.

The original question focused on a requirement to obtain the beneficiary's address - there is none . As you note, these regulations took effect several years ago and, thus, also have no connection to the date the original questioner mentioned.

Ken,

Thank you for your reply. I suppose I wasn't clear regarding the dates. I agree that obtaining a wire beneficiary’s address has no connection with the October 1 CIP effective date that the original questioner mentioned.

However, I respectfully disagree with your viewpoint of paragraph F in the regulatory cite regarding the requirement on obtaining the beneficiary’s address. As you noted, it says that we must receive as many of the following items as are received with the payment order:

(1) The name and address of the beneficiary [F};
(2) The account number of the beneficiary [G]; and
(3) Any other specific identifier of the beneficiary [H].

It doesn't say:

(1) The name of the beneficiary,
(2) The address of the beneficiary,
(3) ……………….

Since name and address are conjoined information under the language of the regulation to be obtained if received with the payment order, I am advising and operating under the interpretation that if one obtains the beneficiary's name then one also must obtain the beneficiary's address. This is likely the interpretation used by the parties that have advised the posters above. In fact, this is an interpretation with which has been concured by various examiners in my audits regarding BSA compliance at various institutions.

Patrick T. Hubbs, CRCM, CBCO

Based on the plain language of the regulation, I am comfortable with our disagreement.

The 7th recommendation of The FATF special recommendations on terrorist Financing says:

7. Countries should take measures to require financial institutions, including money remitters, to include accurate and meaningful originator information (name, address and account number) on funds transfers and related messages that are sent, and the information should remain with the transfer or related message through the payment chain. Countries should take measures to ensure that financial institutions, including money remitters, conduct enhanced scrutiny of and monitor for suspicious activity funds transfers which do not contain complete originator information (name, address and account number).