Banking compliance, why is it needed and why is it so strict?

If you are going to register a company in a foreign jurisdiction or already own such a company,…

If you are going to register a company in a foreign jurisdiction or already own such a company, sooner or later your company will need to open an account in a European or non-European bank.

All banks differ in their requirements for opening a corporate account, but the general policy of all banks is the passage of compliance. At the moment it is an integral part of the procedure for reviewing a company by a bank.

What is compliance?

After the financial crisis of 2008, financial regulators began to increase the level of control over banks and their activities, and they began to demand compliance with numerous new regulatory and legislative norms when conducting banking compliance.

Compliance is the verification by a foreign bank of a client and its activities to comply with financial laws and legislation aimed at combating money laundering. Also, compliance when opening bank accounts is a guarantee that the bank and its clients comply with all the established rules and regulations that are under the control of the financial regulator. Compliance ensures the bank and its customers the safety of reputation in the market.

Why is compliance so strict and how can compliance be completed with no problems?

Compliance is strict for a number of reasons:

  1. The bank is not interested in the fact that customers use the bank in their illegal actions such as money laundering, tax evasion, the financing of terrorism or the illegal seizure of funds from third parties.
  2. The financial regulator imposes huge fines on the bank for failure to comply with the compliance procedures.
  3. The bank must keep itself at a high level of business.
  4. The bank must comply with applicable laws and regulations in all jurisdictions where it operates, and comply with local legal and regulatory requirements.
  5. Banks use compliance as a preventive measure against those whom the client has harmed. Failure to comply with the bank’s compliance procedure with respect to its customers may result in the bank being involved in legal proceedings as in the above case.

In order to successfully complete compliance when opening an account in a foreign bank, you contact a team of professionals who have extensive experience in collecting documents for banking compliance and providing answers to banking compliance issues when opening an account in a foreign bank for your company.

A team of SBSB professionals will help you choose the best option, taking into account the peculiarities of your activity and your wishes. For over five years we have been advising our clients in the areas of corporate law, international tax planning, finance, international licensing and comprehensive business support in more than 40 countries.

We will be happy to help you.

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