The
2011 Guidance was issued because similar organizations are experiencing increasing levels of difficulty in finding banks willing to deal with them. Banks with decades of experience and expertise in this specialized area have simply discontinued this line of business. That discontinuance is based in part in their reassessment of risk levels and in part on the erratic regulatory attention these relationships have drawn. (The Guidance was intended to homogenize the regulatory approach.) The U.S. Department of State is distressed about the circumstance and played a role in the issuance of the interagency guidance.
If your bank has done a detailed risk assessment and decided that it's a good time to enter this business, I admire your
chutzpah. You are clearly willing to swim upstream. However, if your bank is opening its first account for this type of customer simply because someone asked you to, my opinion is that it is making a flagrant error.
The questions you are asking suggest that it's the latter scenario.
At a minimum, your risk assessment and your BSA policy should be updated before you do this. When you explain your requested policy changes to the board, make certain you tell them about Riggs National and that customers such as this one are classified as "subject to expanded examination overview." Provide them with copies of both the 2011 Guidance and the
2004 Guidance. You should talk to bankers or consultants experienced in the subject matter and develop your relevant procedures in advance. Each proposed account should have its own risk assessment prior to opening. Your fee schedule should reflect the additional work and the assumption of risk involved.
This is the deep end of the risk pool.