Have you received a BSA/AML related questionnaire from your correspondent bank? This one from the Wolfsberg Group appears to be the prototype, but some that I've seen supplement these questions with some of their own; e.g. asking for the home addresses of various key people?

If you've received one, do you have any comments or reactions you would care to share?

We receive an "Annual CIP Certification of the Reliance Provision" from our correspondent bank and it is not as detailed as the one from Wolfsberg.

It simply states that our BSA/AML program should contain the four 'pillar' elements, that we screen against OFAC for any wires transmitted through them, that we screen against OFAC and CIP customers who we refer to them for other services.

I sign off every year.

What are they "relying" on you for?? The "reliance provision" is specifically from the CIP regulations. If you are not performing CIP elements for them, their annual certification process is very misplaced and shows a lack of understanding of the regulatory framework. I see banks that think they need to send out such certifications annually to all other parties on their loan participations.

This started somewhere back in 2004-2005 when some of the less than sharp examination crews starting asking banks where their reliance documentation was and hence, this whole unnecessary fiasco raised its ugly head. Chalk up another huge misunderstanding to the field examiners.

Randy,

Do you have clients receiving questionnaires based, correctly or otherwise, on the reliance provision? Similar to the Wolfsberg questionnaire linked above? If so on the latter, do you have any comments or observations?

Do they receive such requests? - every year. If it is erroneously based on some premise of complying with the reliance provision and it does not actually involve specific CIP related activity with the other party, I usually tell them to file them in file 13 and not waste their time.

Unless the bank is involved in transactions in which terms such as "financial intermediary" or "financial counterparty" are being used and used correctly, which eliminates 98% of most commercial banks, I would give them the same advice unless for some reason the organization sending it to them was going to impose some sort of penalty on them for not completing it which they wanted to avoid.

Sending such questionnaires around to financial institutions that are Federally regulated on US shores is just absolutely a waste of time.

What Federally regulated US bank is going to answer no to any of these pillar questions and what does answering Yes actually provide the sender?

I believe The Wolfsberg Group developed that questionnaire as part of their information gathering from institutions that participate in their International Due Diligence Repository and it is not designed to be passed directly between US banks. Anyone using it for that purpose is doing so with a total lack of understanding of the purpose or the need.

In candor I have yet to investigate; it may be as misguided as the "certification" letters, but I do have clients that have received it. In one of them, the upstream correspondent expanded it to require specific, identifying information on the bank's beneficial owners... I'm just curious about how widespread the practice is.

I acknowledge that the "reliance" certification is unnecessary except when Bank A is relying on Bank B to perform some of its CIP related functions.

Completely aside from that, has anyone received requests like the one linked above? Again, your comments would be appreciated.

the upstream correspondent - domestic??

Yup.

Wow - some banks do not have a enough to do I guess and I guess they don't think that other banks have enough to do either. Questions concerning beneficial owners of the Bank??? Who is kidding whom here????

Believe it or not Randy, it's not just Bank's doing this. MasterCard requested BO information on my shop within the past year.

We get "AML and OFAC Certifications" from just about every financial institution, domestic or international, that we deal with. These certifications are not consistent with the Wolfsberg Questionnaire, but require us to state we have an implement a BSA Compliance Program which contains the 4 Pillars, screen for OFAC, among many other things.

Could it be these questionnaires morphed out of the foreign bank certifications required by Section 313 of the USA PATRIOT Act?

https://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_027.htm

It would not surprise me in the least of ill-trained examiners stated requiring banks to obtain these certifications for ALL correspondent relationships.

How else is one to prove they did the "required" CDD on an money center bank?

For the past three years, our bank has received a similar form (which specifically stated AML Questionnaire - Domestic Financial Institution)from one of the larger regional banks which included not only the AML questionnaire (6 pages) to complete but a follow-up phone call for futher inquiry/clarification. We do not have any foreign correspondent accounts...this is a domestic upstream correspondent relationship.

Thank you.

While Mega Banks are traditionally all knowing, they flatter themselves unnecessarily by thinking their form and a phone conversation yield any tangible information. Requests for lists of a bank's beneficial owners and its high risk customers imply more ignorance than insight.

Their concerns would be more logically addressed by queries focused on the findings of regulatory and independent examinations; i.e. comments from those who've asked the same questions and more, but who have also been on site.

Regardless, the downstream correspondent can just say "no" to any such request just as its customers can use the same term in response to a due diligence question. Then, the inquiring party has a decision to make.

So funny, I just logged on here to search this exact thing. I just received one today (the exact one originally linked by Ken from Wolfsberg Group) from a large bank that we use to send international wire transfers. In the relationship we have with this bank, we buy/send wires for a specific customer in foreign currency. I don't see any reason why this would be required on our part. We don't rely on them, nor do they, for CIP purposes and it's a domestic bank.

Correspondent and respondent banks are "partners" in some transactions. Like some other things in life, you are only "safe" if you take AML precautions and your partners take comparable AML precautions. However the real risk of infection is determined by the types and frequency of the contacts between the two parties. Effective queries focus on those contacts and the perceived risks, not a questionnaire where every answer is expected to be "Yes."

To continue with the analogy, asking a federally supervised domestic bank for a list of beneficial owners affords about as much insight into the risks of a proposed relationship as asking someone you met in a bar: "What's your sign?

Bringing this back up as I received one today, BUT it is asking for insane information....

This is a domestic correspondent bank, that I'm actually not sure we even use anymore.

They are asking intended use questions a la what we would ask our new customers (account types and services, if we have relationships with deposit brokers, ATM servicing, wires and if we comply with the travel rule, etc). THEN they want me to give them monthly and quarterly average volumes of all expected activities (number and amount).

There is a section where they want me to disclose how many MSBs we have, those customers' activities, and a detailed explanation of how I monitor them.

They want my personal info, to which I will only give out my office info.

Then want info about my auditor, including name of company, and my regulator, including date of last BSA exam.

Very invasive questions. This hasn't become some new requirement under the new beneficial ownership/CDD rule has it?

ETA: There are no questions asking for beneficial ownership info.

Correspondent Banks are responsible for the dollars that you are sending and receiving through them. If you engage in higher risk activity, they have the risk of becoming an additional conduit for illicit funds from your high risk customers. Before they are willing to accept this risk, they want to know what steps your institution has taken to mitigate its own risk.

There are no new requirements, but many institutions providing these services are performing additional due diligence on the banks for whom they provide these services.

A few banks ago a domestic correspondent wanted to know if we filed any SARs and specifics of them. No they did not get this info.

Ok, thanks.

Am I correct that we are not required to give specifics if we don't want to? I'm ok with answering yes/no questions, but I'm not real comfortable giving dollar figures, activities, etc on my MSB customers. That, IMO, is over-reaching on their part. I have a federal regulator that checks that.

Just as your own customers do not have to provide you specifics when you ask for amount of anticipated cash deposits, wires, source of funds, etc., you are not required to provide specifics.

Just as you are not required to open an account for customers that do not provide the due diligence info you request, your correspondent is not required to continue to provide services for you. A phone call to your account representative may be in order to discuss what they actually do and do not need from you.

Thanks!

It was really strange. While we still have an account with them, we haven't had any activity with them since 2011. They had never sent us anything before. Previous certifications and questionnaires we've received in the past from other banks/correspondents were general yes/no questions.