BSA/AML Examination Manual - ffiec

Private Banking Due Diligence Program (Non-U.S. Persons) — Overview
political figures, and, in particular, their close associates, and thus may not apply
enhanced scrutiny to all such accounts. If the bank’s program is reasonably designed to
make this determination, and the bank administers this program effectively, then the bank
should generally be able to detect, report, and take appropriate action when suspected
money laundering is occurring with respect to these accounts, even in cases when the
bank has not been able to identify the accountholder as a senior foreign political figure
warranting enhanced scrutiny.
Special Procedures When Due Diligence Cannot Be
Performed
A bank’s due diligence policies, procedures, and controls established pursuant to 31 CFR
103.178(a) must include special procedures when appropriate due diligence cannot be
performed. These special procedures must include when the bank should:
• Refuse to open the account.
• Suspend transaction activity.
• File a SAR.
• Close the account.
Applicability Dates
31 CFR 103.178 includes applicability dates for various components of the regulation.
The requirements of the regulation shall apply to each private banking account
established on or after July 5, 2006 (i.e., a bank’s due diligence policies, procedures, and
controls required by 31 CFR 103.178 must apply to all new accounts opened on or after
July 5, 2006).
In addition, the requirements of 31 CFR 103.178 are retroactive to previously established
accounts. However, banks have additional time to apply to existing accounts their due
diligence policies, procedures, and controls established pursuant to 31 CFR 103.178. For
existing private banking accounts established prior to July 5, 2006, 31 CFR 103.178
provides that the requirements of the regulation are effective October 2, 2006 (i.e., by
October 2, 2006, a bank must have concluded applying the due diligence policies,
procedures, and controls designed pursuant to 31 CFR 103.178 to all private banking
accounts in existence before July 5, 2006). Until the due diligence requirements of 31
CFR 103.178 become applicable, the requirements of 31 USC 5318(i)(3) shall continue
to apply.
FFIEC BSA/AML Examination Manual 124 8/24/2007