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#2090170 - 07/27/16 04:57 PM Foreign Entity Guarantor on Loan
downbytheriver Offline
Member
Joined: Jan 2008
Posts: 51
Georgia
My bank currently has a large loan for a US entity which will be guaranteed by two foreign entities based in China. I'm trying to determine exactly what I need to do concerning CIP for these entities. I have been provided with their name and address and can verify this information via the internet. However, I am being told that they will not be providing any type of operating agreements or tax ID numbers. We will be running OFAC on each foreign business but is there something else that I should require to satisfy BSA requirements other than my own EDD for all entities involved with this transaction? Do other institutions require documentation on authorized signers or beneficial owners (I know we will all be going that way soon)? The risk officer for the bank is only concerned with knowing what is explicitly required under BSA.

Thanks in advance for any help you can provide.

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#2090175 - 07/27/16 05:10 PM Re: Foreign Entity Guarantor on Loan downbytheriver
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
The risk officer for the bank is only concerned with knowing what is explicitly required under BSA.

You need a new risk officer. What good is a guarantee from the Chinese corporation? How does the Bank plan to collect from these entities. It sounds like you bank is dabbling in something they have no business being involved with if you already don't know these answers.

As far as actual CIP requirements - see Ken's response:

https://www.bankersonline.com/forum/ubbt...true#Post768039
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#2090187 - 07/27/16 05:28 PM Re: Foreign Entity Guarantor on Loan downbytheriver
downbytheriver Offline
Member
Joined: Jan 2008
Posts: 51
Georgia
Thanks for responding so quickly. I thoroughly agree with you on this point. The credit department knows that naming these entities as guarantors is basically useless because you can't enforce it. Also thank you for Ken's posted comments which I will pushing out to my CRO. As usual I was the last person involved in this discussion and have voiced my opinion to all involved parties. I have also suggested a future discussion around this specific topic so that it can be addressed in our BSA policies as well as the LOAN POLICY.

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