To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
In a supervisory letter (SR 04-10) dated June 16, 2004, the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision, and National Credit Union Administration, in coordination with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), have issued the interagency advisory concerning the embassy banking business and related banking matters.
The purpose of the advisory is to provide general guidance to banking organizations regarding the treatment of accounts for foreign governments, foreign embassies, and foreign political figures.
The joint interagency statement advises banking organizations that the decision to accept or reject an embassy or foreign government account is theirs alone to make. It also advises that financial institutions should be aware that there are varying degrees of risk associated with such accounts depending on the customer and the nature of the services provided, and that they should take appropriate steps to manage such risks consistent with sound practices and applicable anti-money laundering laws and regulations.
The advisory also encourages banking organizations to direct questions about embassy banking to their primary federal bank regulators.
Legal and Compliance Risk Department