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Shell bank

A bank that:

  • has no physical presence in the country in which it is incorporated,
  • is not affiliated with another banking corporation that does have a physical presence, and
  • is authorised to carry on a banking business 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 15 of the AML/CTF Act


A provision under the AML/CTF Act and Rules that enables a reporting entity to rely on customer identification procedures undertaken by another reporting entity or a AML/CTF-regulated foreign third party. This can be done under a customer due diligence (CDD) arrangement or on a case-by-case basis, taking into account the customer relationship and ML/TF risks faced.

See Reliance on customer identification procedures by a third party

Senior managing official

For the purposes of reliance, a senior managing official is an individual who makes, or participates in making decisions that affect the whole, or a substantial part, of the business of a reporting entity or who has the capacity to significantly affect the financial standing of a customer.

Senior officer

For the purposes of a correspondent banking relationship, a financial institution can determine who is a senior officer, depending on the size and complexity of the organisation. A senior officer does not have to be a person in executive management.

The senior officer should have sufficient knowledge of the business’s money laundering, terrorism financing and serious crime risk exposure, and have sufficient authority to make decisions affecting the business’s risk exposure.