I know what ID documentation is required to open an account is set forth by each individual bank's CIP policy. I guess I'm looking at what other bank's are obtaining in order to satisfy themselves that they know the customer. At your bank, would you open an account for a non-US citizen who has a ITIN and a driver's license or would you require additional documents (VISA, I-94, Passport)? If we don't require additional information, how do we know if the person is even in the country legally?

We have a worksheet that is completed on each non-US customer. We require a primary and secondary piece of ID. ie. Primary ID may consist of US driver's license or SSN, secondary ID can consist of passport, green card, visa card. If they cannot provide one primary and one secondary piece of ID we do not open the account.

Thanks for sharing BSA rookie. I'm totally new to the whole non-US person thing. I want to make sure we have adequate ID information. Isn't it possible for a person to no longer be eligible to be in the US, but still produce a valid driver's license and SS card?

The law does not require your bank to establish that the customer is in the U.S. legally. Your bank could impose such a requirement at account inception, but in some cases it would be difficult for you to establish that the customer's continued presence in the U.S. was legal.

We require an NRA to have a valid passport as a primary ID.
We don't get into whether or not they have a visa or have overstayed their visa.

NRA customers are our primary business. If they open an account in person, we require a passport and two reference letters from another bank.

If they open via mail, or through our foreign affiliate, we require either a passport or a cedula (goernment issued foreign id) and reference letters.

Many NRAs will have a tax id and a US drivers lisence but still will be NRAs. For CIP, we treat them as NRA's.

However, for TIN certification purposes, I do believe we question the customer in this scenario to make sure they are really foreigners who still sign the w-8.

Ucan'tdothat - What do you do with customers who don't appear to qualify for a w-8? As bankers we shouldn't give tax advice, but the FFIEC exam manual tells the examiners to look at NRA account activity and "identify patterns that indicate U.S. resident status". I'm currently struggling with how to deal with this disconnect because I'm updating our W-8Ben & CIP procedures.

In my Understanding, if they don't qualify (you have a legit reason to know that) for W-8, the Bank have full right to deny theier membership (thru CIP policy, BSA/AML Risk Assessment). It would be easier to implement than have case by case situations with different NRA.

That's what I was thinking. Now I just have to convince upper management it's a risk to us, because I suspect there are a lot of our customers with W-8s that don't qualify for them.

It doesn't help that I'm sitting right between Berkeley and San Francisco, with their tree sitters and amnesty programs!

Thanks.

I'm also revising W-8BEN procedures, and would like to know what would cause the person not to qualify for a W-8? Is it the fact that they are not legally residing in the US? How do you identify NRA accounts on your core system for monitoring purposes? Do you restrict the types of lending to NRAs and other foreign persons?

If any of you have not listened to Ken Golliher's and Mary Beth Guard's webinar on Opening Deposit Accounts for Non-US Persons, then you have missed one of the best. This area can get so confusing between IRS reporting and CIP compliance issues and they do a stupendous job of explaining it. Every time it comes around I sign up the new CSRs for it. It truly helps. I don't think it is in the Bankers Store, although their "Opening Deposit Accounts for Foreign Persons Matrices" are. Maybe the moderator could give us a little inside info into when the next one will be!

I did find it after all!

Opening Deposit Accounts for Foreign Born Persons

Thanks. Looks like a good course.

I purchased Ken Golliher's webinar on Opening Fiduciary Accounts:Documenting Ownership and Authority, and it had a great section on identifying numbers and certifications. In it, he noted that it is the customer's responsibility to determine if he or she meets the requirements for the W-8BEN.

We just had a BSA exam and the examiner made it clear that we cannot rely on a W-8BEN that has a US address for the customer's residence or mailing address OR if our system shows a US mailing address. In these situations, the customer needs to fill out a W-9 which means they must have a TIN or ITIN (or apply for one.)
While you may not need a TIN for a non-interest bearing account, you still need the TIN for CIP purposes.
My conclusion is that if you have a customer you know is living here (i.e. local mailing address), you can't use a W-8BEN even if they insist they can use one and don't need a TIN or ITIN.

I am not sure that this is correct; does anyone have other information on this examiner's opinion?

SJB, I do not agree. See the CIP reg at 31 CFR 103.121:
"For a non-U.S. person, 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"

Our examiner-approved practice is that a non-U.S. person must either give us a TIN or a passport number & country of issuance (or alien ID #, etc., as listed in the reg above). The ones that would have apparently been compliance issues for us in the past were the ones where the examiner said, "You don't have a TIN on this account. What is this person's passport number?" If we had been unable to produce that (or comparable data such as a U.S. Alien ID card number), it would have been an issue.

I have been told by an examiner (and in several training classes) that a bank employee should not advise a customer on which tax form to use. Telling a customer they should use one or the other amounts to providing tax advice. Unless you have someone qualified to dispense tax advice, it's probably not a good idea to do so.

The same regulator also said that if a customer signs a W-8BEN but then appears to be residing here, we should file a SAR for activity that is not "normal and usual" for a non-resident alien.

Examiners are not always right.

The W8-BEN is used for NRAs only if they are in an interest bearing account.
The W8-BEN must have their foreign address.

The purpose of the form is to report NRAs receiving interest income in the US.

It would be quite normal to see living expenses in these accounts - many NRAs have homes here so they will be paying utilities, etc.

I disagree with this - the form is for bank use.
And it is not giving tax advice.
If we put them in an interest bearing account, we have to report it on the W8-BEN form.
And again, living here for a period would not be unusual for an NRA. Many NRAs have homes here.
Working here would be an issue.

If they are a NRA, they should have a passport- I would hope. That is what we require along with a second form of ID as well. We have a section built into our account system that prompts for NRA information. We also ask is the customer is a PEP at that point as well.

We have serveral NRAs with second homes here, but they don't meet the substantial presence test. I should have been clearer by saying "permanently" living here.

I guess we will have to agree to disagree on the issue of tax advice. By telling the customer which form we think they should fill out, particularly after they've told us they should fill out a different one, we are advising them of their income tax status. I think it's better to direct them to IRS Publication 519, U.S. Tax Guide for Aliens and let them figure it out. Of course, if they don't have an SSN, we'd have to go with a W-8, but customers don't always understand the difference between a SSN and an ITIN.

I like the idea of using a passport only, but the powers that be forced the issue of accepting the matricular consular cards. We've had nothing but problems with this ever since.

Why is the consular card a problem? It qualifies as "any other governnment-issued document evidencing nationality or residence and bearing a photograph or similar safeguard," doesn't it?

See the CIP reg at 31 CFR 103.121:
"For a non-U.S. person, 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"

What do you do for a Foreign Corporation who wants to open accounts (loan and deposit)? I have their state corporation docs, the company's TIN, Signers SSN, but do I need anything else?

Maytagman - The consular card isn't a problem from a CIP acceptability standpoint. It meets the regulatory requirement, which is why we were able to accept it. However,we've had a jump in fraudulent activity that can be directly attributed to this segment of our portfolio.

Plus they all end up filling out W-8BENs (with no ITIN) then proceed to deposit paychecks, so we end up having to do a bunch of SARs. We actually had one guy say he was an NRA, had no tax ID number then deposited an IRS refund check to open the account.

Awesome. I see what you mean. Thanks, BSAdiva.