BSA/AML Examination Manual - ffiec

Private Banking Due Diligence Program (Non-U.S. Persons) — Overview
• Is assigned to, or is administered by, in whole or in part, an officer, employee, or
agent of a bank acting as a liaison between a financial institution covered by the
regulation and the direct or beneficial owner of the account.
With regard to the minimum deposit requirement, a “private banking account” is an
account (or combination of accounts) that requires a minimum deposit of not less than
$1,000,000. A bank may offer a wide range of services that are generically termed
private banking, and even if certain (or any combination, or all) of the bank’s private
banking services do not require a minimum deposit of not less than $1,000,000, these
relationships should be subject to a greater level of due diligence under the bank’s riskbased
BSA/AML compliance program but are not subject to 31 CFR 103.178. Refer to
the expanded overview section, “Private Banking,” page 247, for further guidance.
Due Diligence Program
A bank must establish and maintain a due diligence program that includes policies,
procedures, and controls that are reasonably designed to detect and report any known or
suspected money laundering or suspicious activity conducted through or involving any
private banking account for a non-U.S. person that is established, maintained,
administered, or managed in the United States by the bank. The due diligence program
must ensure that, at a minimum, the bank takes reasonable steps to do each of the
following:
• Ascertain the identity of all nominal and beneficial owners of a private banking
account.
• Ascertain whether the nominal or beneficial owner of any private banking account is
a senior foreign political figure.
• Ascertain the source(s) of funds deposited into a private banking account and the
purpose and expected use of the account.
• Review the activity of the account to ensure that it is consistent with the information
obtained about the client’s source of funds, and with the stated purpose and expected
use of the account, and to file a Suspicious Activity Report (SAR), as appropriate, to
report any known or suspected money laundering or suspicious activity conducted to,
from, or through a private banking account.
Risk Assessment of Private Banking Accounts for Non-U.S.
Persons
The nature and extent of due diligence conducted on private banking accounts for non-
U.S. persons will likely vary for each client depending on the presence of potential risk
factors. More extensive due diligence, for example, may be appropriate for new clients;
clients who operate in, or whose funds are transmitted from or through, jurisdictions with
(such as in the case of a minor child beneficiary), does not cause the individual to be a beneficial owner (31
CFR 103.175(b)).
FFIEC BSA/AML Examination Manual 121 8/24/2007