30 Aug 2009 by Chetan Shah.

Section 311:
Special measure for Primary Money Laundering concerns, this include foreign country, financial institution, type of an account or type of a transaction.
By designating an entity a primary money laundering concern, the government can force US banks to halt financial dealings with the designated entity. It can ask the domestic financial institution to
1. Keep records of each transaction including all the transaction participants and beneficiaries

2. Obtain information of beneficial ownership of any accounts maintained in US by a non US person or his/her representative.

3. Obtain information of all customers who are permitted to use or whose transactions are routed thru the designated financial institution’s
correspondent account.

4. Obtain information of all customers who are permitted to use or whose transactions are the designated financial institution’s payable thru account.

5. Order closure of payable thru and/or correspondent account.

Section 312:
Requires EDD for Correspondent and Private Banking.
The correspondent banking rule applies to bank, broker deals, future commission merchants, mutual funds and introducing broker dealers
The due diligence requirements are based on risk based approach.
EDD for private banking should include senior political figures, their families and close associates.
To fall under this rule Private Banking account must maintain a USD 1 Million or more of minimum aggregate deposit
Private bankers should identify the benefial owners of the account and their source of funds and how they plan to use it.

Section 313:
Do not transaction with Shell Banks.
In addition it prohibits the respondent bank to permit shell bank to access its correspondent bank account through nested correspondent relationship.

Section 319(b):
Allows the Treasury Secretary or attorney general to issue summons or to subpoena records of, a foreign bank that maintains a correspondent account in the US.

Foreign banks must designate a registered agent in US to accept service of such subpoenas.

Section 319(a):
If the funds the US pursues are deposited in a foreign bank which keeps an interbank account at a US bank, the US may attempt to forfeit the crime-tainted funds in the US account.

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24 Aug 2009 by Chetan Shah.

To qualify for FATF membership, a country must :

- Strategically Important.

- Be a member of FATF style body(for example : Asia Pacific Group(APG), Eurasian Group (EAG) etc.

- Provide a letter from appropriate government official making a political commitment to implement FATF recommendations (1, 5, 10 and 13 at the minimum) within a reasonable time frame and to undergo a mutual evaluation process.

- Criminilize money laundering and terrorist financing; require financial institutions to perform KYC, EDD and report suspicious transaction to the country’s Financial Intelligence Unit (FIU).

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22 Aug 2009 by Chetan Shah.

Internet Casinos
• Prime mode of payment used is Credit Card.
• Casinos being on offshore location prevents prosecution
• Government receive tax dollars due to internet casino and therefore have lax controls
• Citibank has banned the usage of Visa and Mastercard for Internet Casino usage
• Banks can identify the type of transaction conducted via credit card by interpreting the transaction codes.
• Internet enables fast transmission of money<
• Online gambling does not lend to any cash movement.

PrePaid Cards and E-Cash
• New Payment technologies like internet payment, mobile payment, digital precious metals, prepaid cards)
• Prepaid cards are like cash, they are portable, exchangeable, valuable and anonymous.
• The cards can be purchased by one person and used by another and that too in a different part of the world.
• There maybe an account for each prepaid card issued or alternatively there may be a pooled account that holds funds for all issued prepaid cards.
• Potential Risk Factors

• In Germany, adding value to a prepaid card is considered as making a deposit and therefore the card issuers are considered credit institutions which require full banking license and follow country’s AML regulations.
• Electronic Purses (or stored value cards) are cards that electronically store value on the chips embedded on the card.
• E-Purses issuance is declining
• Potential Risk Factors for E-purses

• Measure to limit Prepaid/E-Purse vulnerability to AML

Read the rest of this entry »

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5 Aug 2009 by Chetan Shah.

I cannot stress enough the importance of saving money using Roth IRA. Roth IRA is a great vehicle to save money as the investment proceeds from this account are completely tax free. That means that if you make a 20%, 30% or any number of profit on your investment, IRS cannot ask you to pay income on that profit.

Which makes me think to open a Roth IRA account for my wife also. She does not work and therefore has no income to report on our joint Income tax. The question is can I open a Roth IRA for her too and contribute the maximum allowable limit in her account also (in addition to making my 100% contribution to my Roth IRA). The answer is YES, you can contribute to your spouse’s Roth IRA account (even if s/he does not work).

IRS Link : http://www.irs.gov/newsroom/article/0,,id=134667,00.html

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