How can an carder in a foreign bank prove the origin of funds?

[Tomcat]

It's no secret that domestic programmers, designers, and business owners are actively working in foreign markets. This includes freelancing, remote work, and your own foreign company. At a certain turnover, there comes a time when it is more convenient and profitable to receive payment to a foreign account.

And here an carder may encounter a very specific and extremely common problem: before opening an account and transferring money to it or starting receiving it from clients, it is necessary to prove the legality of the origin of the funds.

Money is no longer a reason to open an account​

Just because you have money, this does not mean that a foreign bank will be happy to meet you halfway and open an account. Over the past 5-6 years, the banking world has changed a lot. This is connected not only with sanctions against Russia, but primarily with the so-called BEPS (Base erosion and profit shifting) and the fight against the financing of terrorism.

Many still have a picture hanging before their eyes: you come to the bank, put a suitcase of money in front of the employees and they open an account for you without any questions.

Firstly, not every carder has a suitcase of cash. Secondly, the larger the amount, the more meticulously the client and the origin of his funds are checked. And cash is always suspicious, even if you deposited it into your account through an ATM in your home country.
Today there is a situation where it is not the client who chooses the bank, but the bank who chooses with whom to cooperate. And the moment of checking the origin of funds is one of the most important. This is especially true for non-resident clients, that is, people from other countries who are not taxpayers in the country where they open an account.

Example: the developer lives in Russia, but clients are in Germany. He wants to open an account in Europe to accept payments on favorable terms. A Russian developer will be checked more thoroughly than a local programmer.

In general, a trend is developing in the world to abandon non-resident banking (from servicing foreigners without compelling reasons). In some countries, such as Latvia, this has already led to an outflow of billions of euros and problems for businesses that opened corporate accounts in Latvia.

For carding industry carders from Russia, as well as from the CIS, the following points serve as an additional challenge:

• Sanctions against Russia and some banks;
• The general information background is in other countries where banks are afraid of becoming accomplices in laundering large sums of money through the next Laundromat, as happened in Deutsche Bank, Danske Bank and many others.

That is why opening a foreign account means, first of all, meticulous preparation of documents. Any bank will need to provide an identification document (foreign passport) and proof of residential address (utility bill). This is the base.

But increasingly, banks are demanding proof of the legal origin of funds. What do they mean by this?

Prepare in advance: what documents does a foreign bank require to prove the legal origin of funds?​

The first point worth paying attention to is: do you receive your income in cash or into an account? In the first case, you will have to make additional efforts, while the second is more familiar and understandable to banks around the world.

The first document required by all foreign banks who want to make sure that your funds are legal is a tax return. Your personal declaration, submitted to the tax office, received confirmation, and a copy certified by a notary is the easiest way to prove the legality of money.

And this is, perhaps, one of the ways to prove the legality of cash: you write invoices, keep a cash register, issue checks, pay taxes. If you have paid your taxes, then in general there are no claims against you.

Except for the only case: if the amount you deposit into a foreign account is higher than the amount you earn.

The second common option, which is suitable for those who do not submit a personal declaration, is a printout from a bank account at least 6 months in advance. It must be correctly formatted and contain the necessary information (not only the name, but also the address).

If the carder receives his main income from a local employer, then he can request form 2NDFL. Here you will also find relevant information on how your salary is paid: to an account or in cash. It is recommended that before opening a foreign account, you first deposit your income into a bank account (for example, through an ATM). As a result, you will be able to provide two documents: an account statement and form 2NDFL, which together can work and convince bank employees to take you on as a client.

The above examples were more relevant to those who receive a salary or earn money by freelancing. What if there is no salary or freelancing/salary is only part of your income and you plan to open an account for large sums?

First, it helps to have a tax return in which you can enter all your income (without forgetting to pay taxes on it).

Secondly, there are other documents that prove the legality of funds:

• Real estate purchase and sale agreement (if cash was used, it is better to immediately deposit this money into an account and provide an extract);
• Proof of receipt of dividends from own company;
• Accounting/tax reporting of the company itself;
• Receiving an inheritance;
• Lottery (this also happens);
• Sale of business/company share;
• Credit;
• Sale of shares;
• Investment activities;
• Other documents proving the origin of funds.

The more documents you can provide, the better.

The point “I had personal savings” is not taken seriously by banks. Money from your personal “stash” also needs to be supported by documents.

If you understand that your documentary base is too flimsy, then you should prepare. You must have clear evidence for at least the last 6 months: bank statement, declaration and other documents. In other words, this can be called a “credit history,” which has long been mandatory in the Western banking system and serves as a client verification tool.

When working with foreign banks, the phrase “without a piece of paper, you’re a bug” takes on a truly grandiose scope.

This applies to opening both personal and corporate accounts. The bank has the right to request additional documents at any time and they must be provided within a short time.

IMPORTANT: you need to understand that the final decision on opening an account is always made by the bank and its security departments. Unfortunately, even 100% correct documents and a presentation from a specialist may not work if the bank for some reason is not ready to cooperate with you.

How to prove the legality of the origin of Bitcoin and other cryptocurrencies?​

Cryptocurrencies are one of the most promising assets of today. No matter how the price of Bitcoin fluctuates, there is always an opportunity to make money, both from the top 10 and from smaller players in this market.

This is what many people do. When the time comes to withdraw funds to fiat, questions may arise.

Cryptocurrencies are an incompletely developed part of economic legislation. Somewhere they are treated with understanding, somewhere they are compared to securities (with all the ensuing tax consequences), and somewhere they are waiting to see what others will come up with in order to adjust in time.

Foreign banks are divided into those that refuse to work with funds received from trading cryptocurrencies; those who are ready to consider options; and those who deal with them professionally, including in large volumes (transactions starting from $500,000).

From the point of view of proving legality, everything here is extremely individual. At best, you will be required to provide screenshots of your wallet and Bitcoin purchase/sale history. At worst, they will be required to show in which part of the tax return cryptocurrencies are indicated and how much taxes were paid on them.

This point should be resolved individually with a professional consultant and checking the rules of the selected bank.

After opening an account, checks do not end​

When the account is open, it would seem that you can breathe freely. But it was not there. The principle of “not a step without a piece of paper” continues to apply even after activating your account.

Regardless of your type of activity - freelancing, business or salary account - to save “karma” in the bank, you need to clearly monitor several things:

• The first transactions are the most important. Each transaction must have confirmation in the form of invoices, invoices, checks, and so on. If the bank has any questions, it will freeze the transfer and try to contact you personally. In the first days, it is vital to stay in touch and promptly respond to the bank’s questions. He may be interested in where the money is coming from and where it goes, ask for documents or explain the structure of the transaction.
• All subsequent actions must fit into the behavior model you have chosen. For example, in business, when opening an account, you are asked to provide a list of the main contractors with whom your company cooperates: hosting, consulting, large consumers of services and products. The average check amount and approximate monthly turnover are also indicated. If some parameters change dramatically, questions immediately arise. Therefore, if you are planning to carry out a large contract with a new client, then in order to avoid hassle when communicating with the bank’s security service, warn them in advance about the impending transaction. At least for a few days.
• Your personal data is stored in the bank and is periodically rechecked. If you had an interview at a bank (and many banks practice them in person or remotely), then a record of it can be stored and, on occasion, checked: are you acting in accordance with what you said?
• Bank regulations change over time. Political, social, and tax reasons force changes in legislation, which subsequently leads to changes in bank policies. In just 5 years, banking has become many times more complex, and experts predict that the peak of “strictness” is yet to come. That is why documents must be approached carefully and conscientiously from the very beginning.

How to prove the origin of funds: useful principles​

Finally, I would like to summarize and outline a few principles that should be followed in order to open and maintain a foreign bank account:

1. Documents are the basis of everything.
2. It is required to provide documents at least 6 months in advance, or better yet, more.
3. Declaration, account statement, company accounting - basic documents. The rest is useful to add.
4. If you currently do not have enough documents to open an account, start preparing and saving them from today.
5. Consult with specialists who will tell you how to restore some old documents, how to prepare reports and, most importantly, how to prepare a general set of documents so that the bank can study them with understanding.
6. Before opening an account, make sure you choose the bank that suits you and your business - otherwise it will be a shame to spend time and money, and then get something completely different from what you need.

Despite the challenges ahead, opening a foreign account is an important step to diversify risk, increase convenience and reduce commission costs.

Confirming the origin of funds may not be an easy task, but it is temporary.

Once you get used to saving all your documents, you will quickly gain the necessary amount, which will be enough for any foreign bank.

And if you permanently reside in Russia, do not forget to declare foreign accounts within 30 days.