International banks are governed by many rules.
International banking rules are standards for worldwide financial transactions. Rules are established and amended by the U.S. Congress, and upheld by the Federal Reserve and Federal Deposit Insurance Corporation. Rules stretch far and wide, ranging from Defense Department regulations to the minutiae of electronic transactions. All statewide and local banks must maintain these standards.
Banking Secrecy Rules
Banking secrecy rules are in place to maintain transparency in international finance. According to Bankers Online, secrecy rules specifically relate to reports and transactions concerning foreign accounts, transactions and loans. Domestic banks maintaining more than 20 foreign accounts must annually explain the necessity and activity of these holdings to the commissioner of the Internal Revenue. All transactions and loans must be disclosed with interest rates, disbursement procedures, underwriter names and dates of activity.
Electronic Signature Rules
Electronic signatures are mandated by the Federal Reserve. To secure many foreign transactions, according to Bankers Online, electronic signatures will authenticate a transaction and in-person signatures. Oral agreements cannot legitimize international financial dealings, so electronic signatures are required. All relevant investors must have unfettered access to electronically signed documents pertaining to their transactions. In some circumstances, foreign transactions may also require the electronic signature of a notary.
Record-keeping Rules
The FDIC specifies record-keeping rules with foreign banks that have business dealings with at least one insured U.S. branch. According to the FDIC, foreign banks working with domestic financial institutions must maintain a minimum of one set of records written in English. All records must detail financial practices, accounts and methods of monetary disbursements. Foreign banks that operate insured branches on U.S. territory must follow the same rules. One master copy of records may be kept with foreign banks boasting two or more insured U.S. branches.
