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Why Shouldn’t a US-Citizen “Open Up a Bank Account” for a Foreign National?

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  5. Why Shouldn’t a US-Citizen “Open Up a Bank Account” for a Foreign National?
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  5. Why Shouldn’t a US-Citizen “Open Up a Bank Account” for a Foreign National?

US Federal Law requires that banks “know their customer,” which are called “KYC laws” in the business. To learn more, google “bank KYC laws”.

These laws have been around a long time, but were greatly expanded and standardized, after 911 as part of the US’ “war on terrorism.”

These laws constrain the banks themselves, with significant financial penalties for non-compliance.

There are other laws, however, that govern individuals and companies in the movement of money. Such laws are designed to attack terrorists, drug cartels and criminal organizations. FinCEN’s reporting requirements for currency (cash or coin) transactions over $10,000 conducted by, or on behalf of, one person, as well as multiple currency transactions that aggregate to be over $10,000 in a single day, come to mind.

Therefore, to open a bank account in the US, almost all banks want to physically meet their customers and identify them with valid US-based identification (usually a Driver’s License, US-based passport or other related documentation). Such folks are responsible for legal compliance and can be legally responsible if the bank account is determined to break federal law.

The problem here is, these laws carry not just significant financial penalties (including the potential for RICO forfeiture of personal assets), but they can carry criminal sanctions with serious jail time if found guilty.

Therefore, if a US-citizen opens up a bank account for a foreign national, with the intent of “turning over the bank account” to that foreign national after the bank account is open, that US-citizen risks their freedom and financial wellbeing if that foreign national turns out to use the bank account in a way that violates the law.

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