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#1425975 - 08/09/10 04:28 PM Identifying Resident Aliens
Dani York, CRCM Offline
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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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#1425978 - 08/09/10 04:35 PM Re: Identifying Resident Aliens Dani York, CRCM
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No.

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#1425996 - 08/09/10 04:47 PM Re: Identifying Resident Aliens
Dani York, CRCM Offline
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I was afraid of that. Thanks!
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#1426283 - 08/09/10 09:55 PM Re: Identifying Resident Aliens Dani York, CRCM
Princess Romeo Offline

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Just curious - is there a reason to be able to identify resident aliens?
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#1426370 - 08/10/10 12:37 PM Re: Identifying Resident Aliens Princess Romeo
Dani York, CRCM Offline
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Working on the BSA risk assessment and that is one of things that was set up to be reviewed/noted....come to find out that they haven't been flagged in our system and the staff is going from memory....plus some of them don't know what a resident alien is..... crazy cry

Since there is no way for me to know for sure, the staff now gets to call customers and confirm....and I get to implement some training and new controls...
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#1426377 - 08/10/10 12:43 PM Re: Identifying Resident Aliens Dani York, CRCM
rlcarey Online
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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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#1426385 - 08/10/10 12:55 PM Re: Identifying Resident Aliens rlcarey
Dani York, CRCM Offline
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Originally Posted By: rlcarey
"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.... smirk. 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 cry....(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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#1426395 - 08/10/10 01:20 PM Re: Identifying Resident Aliens Dani York, CRCM
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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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#1426453 - 08/10/10 02:24 PM Re: Identifying Resident Aliens rlcarey
Dani York, CRCM Offline
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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.
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#1426487 - 08/10/10 02:52 PM Re: Identifying Resident Aliens Dani York, CRCM
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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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#1426494 - 08/10/10 02:57 PM Re: Identifying Resident Aliens Dani York, CRCM
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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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#1426507 - 08/10/10 03:04 PM Re: Identifying Resident Aliens Aggs
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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
Dani York, CRCM Offline
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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.... eek
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#1426644 - 08/10/10 04:30 PM Re: Identifying Resident Aliens rlcarey
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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
Elwood P. Dowd Offline
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Quote:
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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#1426722 - 08/10/10 05:46 PM Re: Identifying Resident Aliens Elwood P. Dowd
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If the person is a long time resident alien, it will be very difficult to tell the difference since that person will have a Driver's License, Social Security Number, and you can validate that person on any number of public databases/credit bureaus.

Unless you start asking everyone to "prove" their citizenship, I'm not sure how you would know if someone is a Legal resident alien or a citizen - unless the LRA presented a green card.

Heck - even the CIP regulation says you only need to get "one or more of the following: a taxpayer identification number; passport number and country of issuance; alien identification card number; or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard. "
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#1426761 - 08/10/10 06:17 PM Re: Identifying Resident Aliens Elwood P. Dowd
SunnyFL, CRCM Offline
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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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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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Originally Posted By: SunnyFL
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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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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#1427080 - 08/11/10 12:13 PM Re: Identifying Resident Aliens Princess Romeo
Elwood P. Dowd Offline
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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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#1427096 - 08/11/10 12:34 PM Re: Identifying Resident Aliens Elwood P. Dowd
Dani York, CRCM Offline
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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.
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#1427189 - 08/11/10 02:21 PM Re: Identifying Resident Aliens Princess Romeo
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Sounds like a good plan Dani!! smile
Originally Posted By: Princess Romeo

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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