A shell bank is a corporation that:
- is incorporated in a foreign country
- is authorised to carry on a banking business in its country of incorporation
- has no physical presence in the country in which it is incorporated, and
- isn’t an affiliate of another corporation that’s incorporated in a particular country, authorised to carry on banking business in its country of incorporation, and has a physical presence in its country of incorporation.
Physical presence means the corporation carries on a banking business at a physical place in that country and has at least one full-time employee who performs banking-related duties there. It involves meaningful decision-making and management.
See section 94A of the AML/CTF Act