Payable-Through, Pass Through, and Pass-By Accounts | Definitions and Summary
A payable-through account (PTA) is also referred to as a pass through account or a pass-by account.
These types of accounts are offered by US financial institutions as banking products and are used by foreign financial firms to provide their customers with access to the US financial system.
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What Is the Difference Between a Regular Correspondent Bank Account and a “Payable-Through, Pass Through or Pass-By Account?”
With a payable-through, pass through or pass-by account, a foreign financial firm is able to create a corresponding account in the US.
However, the foreign bank also provides checks to its foreign customers who might be interested in conducting US transactions.
These foreign customers are then able to write checks to withdraw from or make deposits into the account.
In general, these foreign customers of a foreign bank are not subject to anti-money laundering screening, but they end up having full access to the US financial system.
Higher Money Laundering Risk
Based on their nature, payable-through, pass through, and pass-by accounts are considered as posing higher money laundering risk concerns.
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