Bob Lyddon - Lyddon Consulting Services - Thames Ditton 07 May, 2018, 19:12 0 likes

This is all most beguiling and does not say whether all the Virtual Accounts are numbered in a way that is identifiable to the exactly same Account Servicing Institution as the single, actual account. If the actual account is at BAML in the UK, then all the Virtual Accounts should be identifiable to BAML UK too, and not to BAML branches and subsidiaries in other countries, or to BAML partner banks. If, though, the Virtual Accounts are identifiable to different ASIs (inside and outside the BAML group), and payments are flowing into and out of those Virtual Accounts without express mention of the actual account, then there is a very interesting debate about FATF Recommendation 16. Likewise if the Virtual Account is identifiable (through the unique bank details issued to the user client which they put on their invoices) to a different financial institution than the one holding the actual account, an Account Servicing Institution can be deemed to have been established, requiring Customer Due Diligence to the same level as a real account. I will shortly be sending a paper to the Wolfsberg Group about their Payment Transparency Standards 2017 insofar as they address what they call On Behalf Of set-ups (to which Virtual Accounts are closely intertwined). In the putative example that I use in the paper, there are multiple breaches of FATF Recommendation 16 and many instances where a CDD file is missing. It is based on my experience of the usage of Virtual Accounts by a major bank headquartered in the USA to service a Shared Service Centre and the Operating Companies in the same group, where the OpCos all get local IBANs or BBAN+Routing Code, but only the SSC has to send a CDD file and then only to the bank arranging the scheme.