The FFIEC’s BSA/AML Examination Manual includes a concise treatment of the risk factors and possible risk mitigation steps related to business entities. Business Entities (Domestic and Foreign)—Overview. For any foreign businesses, you will have to conduct individual risk assessments before opening the business account. The assessment should review “the domestic or international jurisdiction where the business entity was established, the type of account (or accounts) and expected versus actual transaction activities, the types of products that will be used, and whether the business entity was created in-house or externally.” Ibid. The Manual’s Core Examination Overview details how to measure the risk in each of those categories; it has links to lists of the riskiest countries, the riskiest customer types, and the riskiest products and services. BSA/AML Risk Assessment—Overview.

The Manual describes two kinds of high-risk foreign businesses: international business corporations and private investment companies (PICs) located in offshore financial centers (OFCs). Ibid. Because the Turks and Caicos Islands has been identified as a tax haven, for example by the Congressional Research Service in 2010, we recommend that you review the Manual’s definition of a PIC and take that into account in your risk assessment.

If you do decide to open a foreign business account, the Customer Identification Program (CIP) requirements include some special considerations for foreign businesses. (Although the customer already has an account with the bank, the account involves a new business entity and should be treated as opening a new account. See 31 CFR 1020.100(b)(2)(iii).) As with any business, your CIP must require that the following information be obtained from the foreign business: (1) name, (2) address (principal place of business, local office, or other physical location), and (3) taxpayer identification number. 31 CFR 1020.220(a)(2). A note to the regulation states that if a foreign business does not have an identification number, “the bank must request alternative government-issued documentation certifying the existence of the business or enterprise.” Ibid. The FFIEC BSA/AML Examination Manual recommends that you obtain “articles of incorporation, a corporate resolution by the directors authorizing the opening of the account, or the appointment of a person to act as a signatory for the entity on the account” for all business accounts. Business Entities (Domestic and Foreign)—Overview. If the business is transacting business in Illinois, we also recommend that you request a certificate of good standing authorizing the entity to transact business in Illinois as a foreign corporation under the Business Corporation Act. 805 ILCS 5/13.05.

After obtaining the customer’s information, you must verify it through either documentary or non-documentary methods. 31 CFR 1020.220(a)(2)(ii). Your CIP should take into account the additional risks of a foreign business account in its verification procedures, especially where the bank is not familiar with the documents presented or the customer opens an account without appearing in person (and so on). 31 CFR 1020.220(a)(2)(ii)(B)(2). You may also collect information about the individuals with authority or control over the business’s accounts, including signatories; this step is required if you cannot otherwise verify the business’s identity. 31 CFR 1020.220(a)(2)(ii)(C). And, as always, the CIP must have a procedure for checking customer names against lists of terrorist organizations. 31 CFR 1020.220(a)(4).