Banking for overseas transactions
Banking in even the most unlikely parts of the world has come a long way in the past two decades. The factors which have had the greatest infl uence are the collapse of the Iron Curtain; entry (or prospect of en¬try) to the EU; and the effects of globalisation. The EU rules, for example, require that a country must have a ‘functioning market economy’, which, among other things, means there must be banks providing a compre¬hensive range of services to a wide cross-section of the populace.
That’s a healthy development from the property buyer’s perspective, because having a banking facility in local currency in the country in which you plan to buy is essential to get the buying process underway. You will not only have to be able to put down a deposit quickly in order to secure a property but, once you have bought, utility bills and other local expenses will need to paid and that can be done most conven¬iently by standing orders using a bank based in the relevant country.
Anti-money laundering regulations
‘Money laundering’ is the name given to the process of moving money through various transactions so as to distance the funds from their original (criminal) source. The money may have started its life as a backhander to an offi cial for awarding a contract. That money could then be put into a property development project, which is then sold to foreigners by showing just half the value on the title, with the balance being passed under the table. After a few more transactions, perhaps also asking customers to pay their deposits into offshore banks, the exact source of the cash becomes more and more diffi cult to trace. Also, the more legitimate transactions that take place using ‘dirty’ money, the ‘cleaner’ it becomes, as those transactions are seen as the source of the cash.
If you last opened a bank account in the UK a decade ago, you may be in for a shock if you try to do so again now. In the past, banks were most concerned to see you thump some money on the table and, until you needed an overdraft, few questions were asked about you or where your money came from. Now, in an effort to prevent criminals mov¬ing money around, the banks have been required to be much more circumspect in those to whom they ‘grant permission’ to open one of their accounts. Now you will need to prove who you are and where you live. The bank will also be required to alert the authorities if they no¬tice suspiciously large transactions going through your account.That, in theory, gives the government information as to who the criminals might be.
Currently, opening a bank account in many other countries is still a fairly relaxed process but the processes on monitoring for suspi¬cious transactions are being tightened up. Also, you need to be on your guard to see that you are not drawn unwittingly into a laudering activity. |