Regulatory Alerts2010-06-08
Added
Application of Section 311 Special Measures to the payment of current and future potential obligation of a US customer
FinCEN determines that payments made by a U.S. financial institution on behalf of a U.S. customer to a foreign bank subject to a Section 311 special measure do not constitute the opening or maintenance of a prohibited correspondent account. This ruling applies because the payments are limited to specific obligations like IPO redemptions and dividends, initiated solely by the customer's instructions, and do not establish a formal relationship or regular services for the foreign bank. While these transactions are not prohibited, the institution is cautioned to implement monitoring policies and controls to detect and report suspicious activity related to such payments.
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