Wednesday, September 2, 2015


A US District Judge in Northern Ohio recently sentenced a woman, who pled guilty to structuring, to home confinement, rather than incarceration, to be followed by three years of supervised release. She was a very minor player in a pharmacy illegally selling painkillers without a prescription; her husband and his partner are the principal defendants. Unfortunately, they are not in the US, having reportedly fled to the Palestinian Territory of Gaza.

The lesson to be learned is that we are talking about dual nationals; the female defendant surrendered two passports, US and the Palestinian Authority. When we talk about risk factors, the ability of an individual to travel overseas on a passport other than the one which they possess by virtue of being a citizen of your country, affects your assessment of this individual's ability to engage in financial crime.

At account opening, when you ascertain that the prospective bank client was born in another country, and that country is a high-risk jurisdiction, it is not out of line to ask whether they have any other government-issued identification, containing their photograph. A foreign passport may be the only thing that satisfies that requirement. Alternatively, if your compliance department authorizes it, you should ask where the client is a citizen or national. This is not an invasion of their privacy , but a risk-based compliance program component. You might even discover a variation in the spelling of their name, important for OFAC searches.

This is a risk management issue; in the case above, one wonders whether the bank where the defendants had their business accounts, for the pharmacy, would the fact that they were dual Palestinian nationals affect the compliance assessment of risk, and regular account monitoring ? It certainly might. Dual nationals can often flee the jurisdiction without triggering any alerts set for them as local nationals, for the various spellings of their sur-names, especially if in a non-Western Latin alphabet, can frustrate any attempt to detain them.  

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