In order to avoid possible delays in opening accounts and executing banking transactions in the post-9/11 era, companies must anticipate the information needs of their banks.

Financial institutions have long battled money laundering, but their efforts have increased following the attacks of 9/11 and enactment of the USA PATRIOT Act. The 2001 law requires banks to implement methods for identifying and tracking money used to finance terrorism. It expands upon the Bank Secrecy Act of 1970, which was passed to create paper trails of information about account openings and large currency transactions.

Companies should work with their banks to understand the PATRIOT Act's new information requirements and keep this information readily available and current, so that when there is a need to move quickly to open new accounts and/or add services, they can deliver information to the bank without delay. For example, in certain situations banks now need to see formation documents such as certificates of incorporation, as well as organizational charts spelling out ownership and detailed information on key corporate officers and their political and business affiliations. Educating employees about such requirements is critical to ensuring speedy cycle times and responsiveness to internal clients on banking matters.

Corporations need to be aware that the foreign banks they use may also be subject to laws similar to the PATRIOT Act, although their requirements might not exactly match.

Heightened Scrutiny
"We've always had strong 'know your customer' account monitoring and reporting requirements to maintain the integrity of our relationships," says Catherine J. Kerr, Managing Director in Deutsche Bank's Global Banking Division. "The USA PATRIOT Act has increased the level of scrutiny already given to clients."

Deutsche Bank's Anti-Money Laundering Policy requires employees to complete the following actions related to account set-up and transaction activity to ensure PATRIOT Act compliance:

• Collect and maintain identifying information about entities opening accounts, including their principal officers.
• Confirm such identities and the client's business operations.
• Keep records of all transaction data and data obtained for the purposes of identification.
• Determine whether the client appears on any federally compiled list of known or suspected terrorists or terrorist organizations.
• Report suspicious circumstances or transactions that lack reasonable economic intent, are uncharacteristic for that client or seem unnecessarily complex.

Furthermore, corporate clients may be asked to furnish additional information about a transaction's originator, payee or amount.

A Risk-Based Approach
As with all US chartered banks, Deutsche Bank has a congressionally mandated responsibility to identify suspicious activity and report it to federal authorities. The Bank must confirm clients' identities and who they do business with, and ensure that their transactional activities are reasonable and normal for their particular line of business.

Clients more likely to receive additional inquiries are those that transact business with certain overseas correspondent banks, or non-US parties in countries with lax anti-money laundering laws or ties to terrorism.

Deutsche Bank's approach is risk-based. The risks associated with certain business markets or countries deemed uncooperative with the US government receive heightened levels of due diligence compared to those with lower risk levels.

Since these additional steps could slightly delay account opening and desired transactions, clients are encouraged to provide the Bank with clear, accurate and complete information at the onset of requesting a new account. Regularly updating existing account records is also recommended. Additionally, clients need to be secure in their own trading partner relationships.

The government requires US banks to play a more active role in fighting terrorism and money laundering, which has placed a higher burden on them to obtain more information from clients. It makes good business sense for clients to exercise the same level of responsibility and caution with their own counterparties to avoid exposure to financial or reputational risks.

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