Section 313:- : Prohibition on correspondent accounts for foreign shell banks

Question 1

What is Section 313

Answer 1

Prohibits US banks and securities brokers and dealers from maintaining correspondent
accounts for foreign, unregulated shell banks that have no physical presence anywhere

Question 2

What do the term physical presence of shell bank means

Answer 2

1. at a fixed address, does Has a electronic address,
2. is subject to inspection by the banking authority which licensed it at that location t
3. is authorized to conduct banking activities
4. employs one or more individuals on a full-time basis at that location
5. maintains operating records at that location

Question 3

what does this section says about foreign banks minatining correspondent accounts

Answer 3

foreign banks bank minatining correspondent accounts do not themselves permit access to such accounts by foreign shell banks.

Question 4

what does oreign banks need to certify under sec 313

Answer 4

they do not permit shell banks access to the US correspondent account through a nested correspondent relationship.

equires the foreign banks to certify at least once every three years that they arenot themselves shell banks