In the world of finance, bank accounts are like protective barriers that help you deal with inflation. They’re also those special keys that make buying things from international websites easy, and resemble post boxes for getting money from the jobs you have abroad. But dealing with them isn’t always easy. Want to know what issues you might run into? The article below details the challenges you may encounter as a foreign bank account holder. Keep an eye out for it to learn how to handle them like an expert!
Counterparty payment failures
Common challenges in counterparty payments often stem from inaccuracies in the provided details. Payments may be declined if there are errors or omissions in the recipient bank’s information or their personal details. Several other factors may contribute to payment issues as well:
- A lack of sufficient funds in the sender’s account can result in the bank rejecting the transaction.
- The recipient’s bank may have international payment restrictions that, if surpassed, could cause transactions to be declined.
- The recipient’s bank may block a transaction automatically if it detects suspicious activity.
- Some organizations may not have access to international payment systems, making certain payments impossible.
- Banks may require further information about the counterparty and its financial background before processing a payment.
- Technical difficulties at the recipient’s bank can cause payment rejections or delays.
- A mismatch between the counterparty’s business dealings and the foreign account holder’s activities will create complications.
- Occasionally, a sender may withdraw their payment for various reasons.
What to do: Speak with the bank’s manager, who has the expertise to provide detailed clarifications regarding the issue. Please note that only the account holder themselves is entitled to submit such an inquiry.
Overseas banks deny account opening applications
Recent changes in international banking laws have made it more challenging for foreigners to open bank accounts due to additional documentation requirements.
The global banking sector adheres to the 2012 FATF Recommendations, which are crucial for establishing Know Your Customer (KYC) and Anti-Money Laundering (AML) standards. Failure to comply with these guidelines may lead to application rejections.
Banks seldom disclose the exact reasons for refusing you an account. However, these are common factors that could lead to such a decision:
- The applicant has provided unreliable information.
- The financial institution has uncovered negative information about the company or its beneficiaries.
- The company lacks the required licenses for its business activities.
- There is fraudulence in the documents submitted.
- The company is involved in business activities that are unrelated to its main operations.
What to do: Provide the bank manager with detailed personal and business information. If your application is declined, assess it for errors before approaching another bank. A pre-approval service may help you gain initial multi-bank account setup approval.
Unexpected payment transaction charges
Account holders might sometimes notice higher-than-normal commissions on payments. Here are the common reasons:
- Interbank Fees: Payments passing through several banks or systems may incur a fee from the receiving bank.
- Operational Costs: Fees rise for transactions that are complex or non-standard, requiring more effort and resources.
- Currency Conversion: Sending money in a currency different from the account’s may result in conversion charges.
- Express Services: Faster payment processing typically carries additional costs.
- Risk Insurance: There are extra fees for handling physical documents or international transfers.
- Unusual Transactions: The bank may charge more for transactions that appear non-standard or suspicious.
- High-Risk Jurisdictions: Sending or receiving funds from regions considered high-risk may lead to higher fees.
- Payment Instructions: Instructions labeled as BEN, OUR, or SHA sometimes trigger unusual commission fees.
What to do: Promptly contact your bank manager for an explanation. Make sure you understand the bank’s fee policy and closely examine the details of the specific transaction involved.
Account closure
In the case of an account closure, verify the reasons for it before closing and withdrawing. Funds typically go to other corporate accounts, the owner’s account, or are cashed out at the company’s desk.
What to do:
- Start by formally requesting the bank to close your account.
- Prepare all necessary additional documents.
- Adhere to the bank’s specific account closure protocols.
- Select an appropriate method to withdraw any remaining funds.
- Finalize the closure, and retain all pertinent documents and receipts for records and potential disputes.
Personal data updates
If there’s a change in your personal details, say, your address or phone number, promptly notify your bank manager thereof. The bank might directly update your information or ask you to complete the necessary paperwork. Typically, this service is subject to a fee as per the bank’s prevailing rates.
What to do:
- Consult the bank manager on the procedure for updating your details.
- Gather all documents required for the update.
- Head to the bank or use its online platform to apply the changes.
- Ensure the accuracy of the changes and verify them.
- Check your bank profile to make sure it reflects the updates.
- You may need to update your bank cards, checkbook, and any other personal documents subsequently.
Adverse findings
When reviewing documents for a company, the bank may uncover unfavorable information about the applicant, their beneficiaries, or business partners from media or online sources. Needless to say, such findings could lead to application rejections.
What to do: Thoroughly check all details when preparing documents. Disclose any negative findings about your company or beneficiaries early in the foreign bank account application. Justify any issues and steer clear of dubious business partners initially.
Sudden account terminations
Sometimes, a company might unexpectedly find its foreign corporate bank account frozen. Such suspensions occur due to various factors, including agreement breaches, fraud detection, your company’s financial Instability, bank policy shifts, legal compliance, and even technical glitches.
What to do: Account holders should closely monitor bank notifications and avoid dealing with suspect parties or activities.
Extended document processing times
When documents are pending with a bank for an unusually long time, it could be due to an increased workload, document issues, security checks, operational updates, regulatory compliance issues, or financial reviews.
What to do: Make sure you heed all requests for supplementary information from the bank. Meticulously review all documents prior to submission and promptly settle any outstanding banking fees.
Still at a loss as to your future actions? Contact International Wealth experts for solutions, it never fails!
