Form helps scrutinize foreign funds

The State Department has set up an online form for banks and other financial institutions to use when they need to check with an agency about potential customers who claim to be foreign government officials.

And within weeks, the department expects to be able to accept such queries online, according State's Bureau of International Narcotics and Law Enforcement Affairs.

The move is designed to thwart illegal deposits of foreign assets in the United States.

State has posted a three-part online form that users may print out, fill out and fax to the department.

However, even when the form can be filed online, "We won't be able to give a real-time response," a bureau official said. "But we'll check with the [pertinent] country desk, which will get on the phone or on e-mail and contact the country to confirm" the person's identity.

The bureau consulted with the Treasury Department and financial regulatory agencies in developing guidance, released Jan. 16, on how financial institutions may improve security for transactions "that may involve the proceeds of foreign official corruption."

Corruption involving the embezzling of foreign government funds is not new. But since the ouster of Ferdinand Marcos of the Philippines in 1986 and revelations that his overseas financial nest eggs were feathered with his county's money, there has been greater public awareness — and outrage — over theft by government executives and officers, according to the bureau official.

"If you're dealing with a senior official of a [foreign] government, you've got to be aware, because there are cases where some of these people turn out to be crooks," he said.

The guidance is not intended to discourage banks from doing business with foreign officials, he said, but to make bankers more aware. Bankers with any reservations about the official and the account, he suggested, might want to go to their own supervisors first and let them know what is going on.

"There have been jokes for decades about people with Swiss bank accounts. But the problem has been getting worse as globalization becomes greater, and it's easier to move money around," he said. "You still have to go through hurdles, even if they're electronic, but it's easier. Money can be moved through many jurisdictions very quickly."

Featured

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.