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#1425975 - 08/09/10 04:28 PM
Identifying Resident Aliens
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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Is there a way to identify resident aliens by SSN? For instance if the first 3 digits fall in XXX -YYY?
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1425996 - 08/09/10 04:47 PM
Re: Identifying Resident Aliens
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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I was afraid of that. Thanks!
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1426377 - 08/10/10 12:43 PM
Re: Identifying Resident Aliens
Dani York, CRCM
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10K Club
Joined: Jul 2001
Posts: 84,333
Galveston, TX
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"the staff now gets to call customers and confirm...."
Why? Sounds like a waste of time and will probably just cause customer anxiety.
They either provided you with required CIP information, the same as full blown citizens, or they didn't. Resident aliens are normally not associated as high risk accounts. They have already been vetted by the US Gov't. It is the non-resident aliens that should probably be flagged in your system for potential monitoring, W-8BEN tracking, etc.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1426385 - 08/10/10 12:55 PM
Re: Identifying Resident Aliens
rlcarey
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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"the staff now gets to call customers and confirm...."
Why? Sounds like a waste of time and will probably just cause customer anxiety. Partially because I'm just mean.... . I may approach it differently (previous post was more of a rant, should've added the disclaimer) and just go with the list I have, train and go on. What I've found is that some of the staff is not properly trained ....(and on that, I'm going to be quiet). As far as the risk, I realize that being an RA in itself does not make a customer high risk; however, I do think it would be a consideration when evaluating their risk in relation to other factors. For instance, an RA from South America who operates several cash intensive businesses, conducts occasional wires, and the bank is located in a HIDTA along a known interstate route used by drug dealers. High risk without the RA status, but I think it is something to be considered and noted. From a CIP standpoint, RA status has not been addressed for info collection,so we are in compliance with our CIP policy, but from a KYC/CDD standpoint, I think it should (and will) be addressed.
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1426395 - 08/10/10 01:20 PM
Re: Identifying Resident Aliens
Dani York, CRCM
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10K Club
Joined: Jul 2001
Posts: 84,333
Galveston, TX
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"For instance, an RA from South America who operates several cash intensive businesses, conducts occasional wires, and the bank is located in a HIDTA along a known interstate route used by drug dealers. High risk without the RA status, but I think it is something to be considered and noted."
Any operation such as that should be subjected to your EDD processes anyway. If you accept a State Driver's License as ID, how are you ever even going to know for any individual unless you are also asking whether or not the individual is a citizen???
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1426453 - 08/10/10 02:24 PM
Re: Identifying Resident Aliens
rlcarey
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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Randy, that is my point, hence my rant about the staff. I have some holes to shore up. The example I gave is a real-life situation and we don't know 100% if he is an RA or a citizen. The CDD and EDD process that the bank has had prior to my coming on board this year is lacking (which is why I am trying to address it).
How are we going to know? I'm going to have them ask the question at account opening and then flag it in the CIF record. Isn't that something we should already be doing? I think so, but maybe it's overkill?
I do appreciate your feedback though.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1426487 - 08/10/10 02:52 PM
Re: Identifying Resident Aliens
Dani York, CRCM
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10K Club
Joined: Jul 2001
Posts: 84,333
Galveston, TX
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On the deposit side, I have not seen too many banks go out of their way to identify RAs. Usually the only way they might know is if they presented a green card for identification purposes.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1426494 - 08/10/10 02:57 PM
Re: Identifying Resident Aliens
Dani York, CRCM
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Diamond Poster
Joined: Nov 2009
Posts: 1,331
Hoosier Country
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Dani, a Resident Alien = Green Card = same treatment and privileges as a US citizen (with the only exception being that an RA cannot vote or work in certain parts of the US Government). The Resident Alien has basically been given the ok to reside in the US permanently. You really don't need to do anything with RAs. I don't think you need to scrutinize RAs more than other customers.
I agree with Randy, implement a procedure where you identify non-resident aliens - usually indicated by W8-BEN, etc.
A resident alien does not pose more (or less) risk than a US citizen. If an RA maintains a high-risk account, that is due to the nature of the account/business, not the person's legal residency status.
I wouldn't worry about overhauling your entire process. Just focus on the CIP and identify what you do want to know. I would categorize RAs in the same group as citizens, and then have additional CIP information required of non-resident aliens and temporary visa holders.
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CRCM + CAMS = certified compliance nerd
Opinions expressed in these threads are my own and not my employer's.
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#1426507 - 08/10/10 03:04 PM
Re: Identifying Resident Aliens
Aggs
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Georgia Plum
Unregistered
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And unless you ask if they are a citizen, again, you won't know if they are a RA, NRA or not. And even if you ask, this doesn't mean you will get a truthful answer since they already have a fake ID/DL and SSN.
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#1426555 - 08/10/10 03:24 PM
Re: Identifying Resident Aliens
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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Do we even need to identify them in our risk assessment then? I am just going off of the one that the bank has been using and the parameters set up by the previous BSA officer. If it isn't necessary then I would love to take it out and move on. I am new to completing the risk assessment and being "in charge" of this area. I know enough to make me paranoid that I'm leaving something very important out, hence me being overly cautious I guess. That being said, even the previous BSA officer has acknowledged that our due diligence is lacking....
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1426644 - 08/10/10 04:30 PM
Re: Identifying Resident Aliens
rlcarey
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Member
Joined: Oct 2006
Posts: 96
PA
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We ask at account opening if a customer is a U.S. citizen. Then we can use it in our AML/BSA software as one of the risk scores for monitoring activity and if needed, it is a piece of information to add on a SAR narrative.
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#1426704 - 08/10/10 05:26 PM
Re: Identifying Resident Aliens
Dani York, CRCM
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Do we even need to identify them in our risk assessment then? If the BSA/AML Examination Handbook is to be believed, yes. It identifies several customers that it describes as subject to "expanded examination overview." One type is "Non resident aliens and foreign individuals." The bulk of the discussion is on NRAs, but it clearly indicates: Foreign individuals maintaining relationships with U.S. banks can be divided into two categories: resident aliens and nonresident aliens. and The bank’s CIP should detail the identification requirements for opening an account for a non-U.S. person, including an NRA. Just like they do for every other person subject to expanded examination overview, the examination procedures indicate examiners should: 2. From a review of MIS and internal risk rating factors, determine whether the bank effectively identifies and monitors higher-risk NRA and foreign individual accounts. You cannot identify "high risk" foreign individuals if you do not know who your foreign individuals are. If examiners ask for a list of non U.S. persons, it's fairly clear that your bank should be able to produce it.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1426761 - 08/10/10 06:17 PM
Re: Identifying Resident Aliens
Elwood P. Dowd
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100 Club
Joined: Sep 2004
Posts: 205
FL
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I would recomend revising the account opening question to "Are you a U. S. Person?".....U.S. person being defined as U.S. citizen or resident alien. As others stated previously, you really only need to identify NRAs. In the customer section of our BSA Risk Assessment, we discuss the number of NRA customers vs total customers (among other things) to demonstrate the type of customer base our bank has and in my opinion, those numbers have a great deal of influence on your overall BSA program. Resident aliens on the other hand, should carry the same weight as U. S. citizens.
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#1426798 - 08/10/10 06:46 PM
Re: Identifying Resident Aliens
Princess Romeo
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New Poster
Joined: Dec 2009
Posts: 21
Iowa
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The CDD Form that we have the customer complete at account opening asks if the customer is a US Citizen and for the customers home country, there is also a section to list the type of identification used for verification purposes along with several other CDD/EDD questions. Our Customer Service rep. helps the customer complete the form and I evaluate each new account to determine if the account is a high-risk account.
An account should be deemed high risk at account opening and tracked from that point on. And in my opinion, that is the BSA Officers responsibility to track and monitor those accounts. I am assuming if you are only looking at them during a risk assessment they are not being periodically reviewed. Your BSA Policy should outline how often these types of accounts should be monitored and which types of accounts are considered high risk.
And if it doesn't, I would suggest reviewing the BSA/AML Examination Manual for guidance.
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#1426807 - 08/10/10 06:50 PM
Re: Identifying Resident Aliens
SunnyFL, CRCM
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New Poster
Joined: Dec 2009
Posts: 21
Iowa
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In the customer section of our BSA Risk Assessment, we discuss the number of NRA customers vs total customers (among other things) to demonstrate the type of customer base our bank has and in my opinion, those numbers have a great deal of influence on your overall BSA program. Resident aliens on the other hand, should carry the same weight as U. S. citizens. I agree! We do the same thing for our risk assessment.
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#1426820 - 08/10/10 06:57 PM
Re: Identifying Resident Aliens
Stelk
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Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
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I know people who are legal aliens that have been in this country for over 30 years. If you ask them for their "home" country, most will say "United States" as that is what they feel.
I don't know if I agree that an account should be deemed high risk at account opening. For certain accounts, yes - it would be a given that the account is high risk such as an MSB, dealer in precious metals/gems, or a customer involved in a lot of foreign trade activity.
But other accounts might not be a high risk at account opening, but become high risk due to subsequent activity. Likewise, you can have an account you deem as high risk, but after 2 years of non-high risk activity, what's the point of keeping it on the high risk list?
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CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
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#1427080 - 08/11/10 12:13 PM
Re: Identifying Resident Aliens
Princess Romeo
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10K Club
Joined: Aug 2001
Posts: 21,939
Next to Harvey
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Asking "In what country are you a citizen?" is, in my opinion, the most fundamental due diligence question for a consumer customer. Obviously, the customer can always lie. If the customer has an SSN and a state drivers license there is simply no way that the lie will be apparent. The issue is whether or not you tried to identify non U.S. persons.
A customer is not "high risk" just because it is on the "subject to expanded examination overview" list. All being listed does is get those customers some enhanced due diligence; identifying them allows or requires the bank to evaluate their activity from a different perspective.
While the Internal Revenue Code takes a different tack, BSA considers only U.S. citizens as U.S persons. Resident aliens do not get an automatic "pass" under BSA and I would not give it to them as a matter of policy either.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.
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#1427096 - 08/11/10 12:34 PM
Re: Identifying Resident Aliens
Elwood P. Dowd
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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So I went back and re-read the exam manual on the subject. I've decided that I'm going to go with the list of RAs that I have (even though we don't know 100% if they really are RAs or US citizens) and implement the citizenship question at account opening for the very reason that Ken indicated...to at least show that we tried to find out for CDD/EDD. Then use the RA status as a consideration if other high risk activity occurs (similar to the South American customer scenario I posted earlier).
Thanks! I appreciate all your input.
Last edited by Dani York; 08/11/10 12:35 PM.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.
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#1427189 - 08/11/10 02:21 PM
Re: Identifying Resident Aliens
Princess Romeo
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New Poster
Joined: Dec 2009
Posts: 21
Iowa
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Sounds like a good plan Dani!! I don't know if I agree that an account should be deemed high risk at account opening. For certain accounts, yes - it would be a given that the account is high risk such as an MSB, dealer in precious metals/gems, or a customer involved in a lot of foreign trade activity.
But other accounts might not be a high risk at account opening, but become high risk due to subsequent activity. Likewise, you can have an account you deem as high risk, but after 2 years of non-high risk activity, what's the point of keeping it on the high risk list?
I wouldn't keep it on the high-risk list after 2 years of non-high risk activity but I would add them to the high-risk list at account opening and monitor the account to establish a pattern of activity. We also have daily reports that are reviewed and if a customer becomes high-risk they are added to the list. From my experience with examiners, a customer in a high-risk category is high risk until proven not be high-risk. Of course, every regulator and examiner is different!
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