Correspondent Banking 3. Required Due Diligence Documents

The following Due diligence documents are sought for establishment of correspondent banking:

1       1. Policy and Guidelines for Money Laundering and Terrorist Financing Risk of the bank to determine the capacity of bank to prevent possible Money Laundering and Terrorist Financing. In addition, 

2      AML- CFT Questionnaire to be filled in by respondent and correspondent banks

3    3. Wolfsberg Group Financial Crime Compliance Questionnaire (FCCQ) v 1.0

4    4. Wolfsberg Group Correspondent Banking Due Diligence Questionnaire (CBDDQ) V 1.2

Difference between 3 and 4

 Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks.The CBDDQ and its guidance material provides a much more comprehensive set of questions to address today’s financial crime risks for cross-border and/or other higher risk Correspondent Banking relationships. The Entity is required to complete all 110 questions if engaged in cross-border and/or other higher risk Correspondent Banking services. This revised version of the original questionnaire is called The Wolfsberg Group Financial Crime Compliance Questionnaire (FCCQ).

5.   5.  Certificate of Status of Beneficial Owner for United States Tax withholding and reporting (FATCA) Form W-8BEN-E

W-8BEN-E is an important tax document which allows businesses operating outside of the U.S. to claim tax exemption on U.S.-sourced income.  The official document title is Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).

Under U.S. tax regulations, a mandatory amount of 30% must be withheld by any company paying a foreign entity conducting business within the U.S.  If the foreign company is based in a country which has a tax treaty with the U.S., however, it may fill out and submit a W-8BEN-E to be exempted from the 30% withholding (and other applicable American tax laws).

6   6.   CRS form: The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

To help protect the integrity of tax systems, governments around the world are introducing a new information gathering and reporting requirement for financial institutions. This is known as the Common Reporting Standard (the CRS). Regulations based on the Organisation for Economic Cooperation and Development ("OECD") Common Reporting Standard (“CRS”) require Financial Institutions ("FIs") to collect and report certain information about an account holder’s tax residency.

Self-certification is the process whereby a Financial Institution asks their Account Holders to certify a number of details about themselves in order to determine the country/countries in which they are tax resident. We are required to collect this information under both FATCA and CRS.  FATCA compliance simply requires a declaration giving information about FI.

7 7. Certificate of Incorporation: Certificate of Incorporation: RJSC will issue a Certificate of Incorporation of the company. The certificate will have the registration number, name of the company and the date of incorporation. Form XII: Form XII contains the list of directors of the incorporated company.

8.      Certificate for Commencement of Business: It was a mandatory step until Companies Act, 2015 was introduced. The Act has now removed the previous compulsion of having this certificate. Now, it depends on you whether to obtain one or not. We should know what  a certificate of commencement of business is.

The certificate of commencement of business was important because only after obtaining the certificate were you allowed to start any business related activities. Before that, you were not allowed to exercise any kind of powers or benefits which come along with company registration.

        9.  Memorandum and Articles of Association

The memorandum of association and articles of association are the two charter documents, for setting up of the company and its operations thereon. ‘Memorandum of Association‘ abbreviated as MOA, is the root document of the company, which contains all the basic details about the company. On the other hand, ‘Articles of Association‘ shortly known as AOA, is a document containing all the rules and regulations designed by the company. While the MOA sets out the company’s constitution, and so it is the cornerstone on which the company is built. Conversely, AOA comprises of bye-laws that govern the company’s internal affairs, management, and conduct. Both, MOA and AOA, requires registration, with theRegistrarr of companies (ROC), when the company goes for incorporation.

1        10.  TIN Certificate

11.  GIIN Number: A Global Intermediary Identification Number (GIIN) is a unique ID number that non-US financial institutions receive from the IRS when they register as a financial institution for FATCA.

GIIN serve as a kind of fingerprint for each individual entity within the FATCA registry, allowing users to differentiate between entities quickly and easily. As such, they are used not just by the Internal Revenue Service (IRS) for registration and reporting purposes, but by other FFIs and U.S. withholding agents.

In order to avoid the withholding requirements on foreign accountholders, investors, shareholders or partners, your company needs to gather, review and maintain GIIN documentation. What’s more, the IRS requires companies who have entered into FATCA agreements to reconcile all GIINs with their databases on a regular basis. In addition, any previously confirmed GIINs must be reconfirmed on a regular basis.

It is important to note that, in some instances, countries have opted to enter into an intergovernmental agreement (IGA) with the U.S. in order to satisfy their FATCA obligations. Countries may choose this route as a way of preventing their national companies from having to deal directly with the IRS. In such agreements, FFIs will report to their individual government agencies, which then pass on those reports to FATCA.

12. USA Patriot ACT Certificate: The USA Patriot Act is a law passed shortly after the September 11, 2001, terrorist attacks in the United States that gave law enforcement agencies broad powers to investigate, indict, and bring terrorists to justice. It also led to increased penalties for committing and supporting terrorist crimes.

An acronym for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism,” this anti-terror measure was chiefly designed to lower the probable cause threshold for obtaining intelligence warrants against suspected spies, terrorists, and other enemies of the U.S. The USA Patriot Act deters and punishes terrorist attacks in the United States and abroad through enhanced law enforcement and strengthened money laundering prevention. It also allows the use of investigative tools designed for organized crime and drug trafficking prevention for terrorism investigations.

• Proponents of the USA Patriot Act claim it aids law enforcement in combating terrorism.
• Many Americans oppose the USA Patriot Act, saying much of the law infringes on constitutional privacy rights.

  

13.  Bank License Notarized: A Notary Public is an official of integrity appointed by state government —typically by the secretary of state — to serve the public as an impartial witness in performing a variety of official fraud-deterrent acts related to the signing of important documents. The purpose of notarizing a document is to verify the signature belongs to the person signing the document as witnessed by the notary.

1  14.  Latest Trade License of Bank : Porvided by Dhaka South City Corporation

1   15.  Permission to Operate Off-shore Banking Unit (OBU): Given by Bangladesh Bank

    16.   List of Board of Directors

17   LEI Code from GMEI: The most basic definition of the LEI code is a 20-digit alphanumeric code that is unique to each legal entity. In many ways, using a LEI code is a lot like being assigned a student number when attending a college or university, only on a much larger and more significant scale.

The Global Legal Entity Identifier Foundation (GLEIF) is in charge of accrediting certain financial institutions in order to allow them to issue LEIs. They were given the role of overseeing this important project by the Financial Stability Board (FSB). The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system This system is used in all areas of the world in order to provide institutions with detailed information about legal entities to help streamline the onboarding process.

118.  BIN Certification: Given by National Board of Revenue.