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#710565 - 04/03/07 05:12 PM NRA's and Non-U.S. Citizens
hawkfan Offline
Member
Joined: Feb 2006
Posts: 83
Can anyone help explain how we know (other than asking) if our customers are a non-resident alien or resident alien, or even a non-U.S. citizen? It is really confusing to me. Can you tell by the SSN or ITIN? Can only resident aliens get SSN's? Any clarification is helpful.

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#710886 - 04/03/07 08:52 PM Re: NRA's and Non-U.S. Citizens hawkfan
Rosie O'Grady Offline
Gold Star
Rosie O'Grady
Joined: Nov 2005
Posts: 438
California
Hi Hawkfan,

We ran into the same difficulty as you. So here's what we did:
1. We identified all customers with ITINS and flagged their account so that we could determine if they were U.S. Citizens or not and file maintenance their account accordingly when they were in the branch.
2. We identified all customers who used a foreign passport as identification to open their accounts and flagged them as non-citizens.
3. We identified all customers with out of country addresses other than those with military addresses and flagged them as well. In this case, we corresponded via letter with these customers.
4. Going forward, this is a question on our new account application and gets file maintenanced on the system.

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#710967 - 04/03/07 11:21 PM Re: NRA's and Non-U.S. Citizens Rosie O'Grady
MagicCity Offline

Power Poster
MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
It is a question on our application.
The problem with this is that you never know when they do become citizens.
So does this list just keep getting longer and longer?

There are many people who are Resident Aliens, but they never become citizens... and they don't have to.
And, I think if they have gone through the Resident Alien process then they have been checked by the U.S. Government and we should not be selecting them for special attention.

That's how I feel about it, - but as a bank, we do track all Non U.S. Citizens.

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#711022 - 04/04/07 10:39 AM Re: NRA's and Non-U.S. Citizens hawkfan
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Quote:
...this is a question on our new account application

Quote:
It is a question on our application.


I encourage you to simply follow your prior respondents' lead: Ask every new customer in which country are they a citizen.

There are enough permutations in regard to their status in the U.S. and taxpayer identification numbers to make things complicated, but you need a clear, unequivocal answer to this question. It's due diligence at the fundamental level and, as Rosie illustrates, figuring it out after the fact is labor intensive and, perhaps, imprecise. For example, having an SSN tells you nothing; they can be obtained by citizens, resident aliens, and, under some circumstances, non resident aliens.
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#731838 - 05/15/07 02:29 AM Re: NRA's and Non-U.S. Citizens Elwood P. Dowd
canadian complia Offline
New Poster
Joined: Mar 2006
Posts: 5
Florida
NRAs must execute a W-8 tax form, which if they don't, should be a red flag as to why they don't care about forfeithing > 30% tax withholding on certain US source income.

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#731848 - 05/15/07 08:23 AM Re: NRA's and Non-U.S. Citizens canadian complia
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
On bank deposits, the law only requires NRAs to execute W8-BENs in connection interest bearing accounts. Outside of IRS considerations, under BSA they are subject to "expanded examination overview" and must be identified regardless of whether the account is interest bearing.

"Nationality, please?" is a basic customer due diligence question.
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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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