BSA/AML Examination Manual - ffiec

Foreign Correspondent Account Recordkeeping and Due Diligence — Overview
Special Procedures When Due Diligence Cannot Be
Performed
A bank’s due diligence policies, procedures, and controls established pursuant to 31 CFR
103.176 must include procedures to be followed in circumstances when appropriate due
diligence or enhanced due diligence cannot be performed with respect to a foreign
correspondent account, including when the bank should:
• Refuse to open the account.
• Suspend transaction activity.
• File a SAR.
• Close the account.
Applicability Dates
General Due Diligence
The general due diligence requirements of 31 CFR 103.176(a) apply to each foreign
correspondent account established on or after July 5, 2006 (i.e., a bank’s general due
diligence policies, procedures, and controls required by 31 CFR 103.176(a) must be
applied to all foreign correspondent accounts opened on or after July 5, 2006).
In addition, the general due diligence requirements of 31 CFR 103.176(a) are retroactive
to previously established accounts. For foreign correspondent accounts established prior
to July 5, 2006, 31 CFR 103.176(e) provided that the general due diligence requirements
of the regulation became effective October 2, 2006 (i.e., by October 2, 2006, a bank must
have begun application of the general due diligence policies, procedures, and controls
designed pursuant to 31 CFR 103.176(a) to all foreign correspondent accounts in
existence before July 5, 2006).
Enhanced Due Diligence
Pursuant to 31 CFR 103.176(f), banks that are not otherwise exempt must apply the
enhanced due diligence requirements of 31 CFR 103.176(b) to all correspondent accounts
established for or on behalf of the foreign banks identified in 31 CFR 103.176(c) on or
after February 5, 2008 (i.e., a bank’s enhanced due diligence policies, procedures, and
controls required by 31 CFR 103.176(b) must be applied to all correspondent accounts
opened for such foreign banks on or after February 5, 2008).
Additionally, the enhanced due diligence requirements of 31 CFR 103.176(b) are also
retroactive to previously established accounts. For correspondent accounts opened for
the foreign banks identified in 31 CFR 103.176(c) prior to February 5, 2008, 31 CFR
103.176(f) provides that the enhanced due diligence requirements of the regulation are
effective May 5, 2008, (i.e., by May 5, 2008, a bank must have begun application of the
FFIEC BSA/AML Examination Manual 113 8/24/2007