Interactive brokers deposit rejected

[whoisthis344]

I made a deposit to IBKR from my offshore bank account at TBC in Georgia, and IBKR is now asking me for proof of residential address/office in Georgia. Strange thing is, I have made many deposits larger than this from the exact same bank account to IBKR in the past without problems.
Actually last year they sent me the same message, but custom service cleared it anyways after I explained my expat situation. I tried CS again this time, but now they say "International regulations are changing", so they don't allow foreign bank accounts unless I have residence/office there, and I must submit an update to my address.

Is this really true? Are we not allowed bank accounts in other countries?
Any recommendations on how to respond. I'm a bit scared they will perm close my account with my remaining funds .


Background: Expat living in Dubai for the last 15+ years, passport is from a large asian country. I have been using IBKR for 2+ years.

Thanks

 

[JohnnyDoe]

Substance requirements…

 

[whoisthis344]

Substance requirements…

Yes I this is what they are requesting. Though my understanding is that it's usually for opening bank accounts, not transfers.

Do you have suggestions here or experience dealing with changing IBKR demands. :/

 

[Fred]

The reason for this request is that IBKR is not a Bank and follows usually the regulated Financial Institution - Bank the Account Holder is using.

Georgia is a famous account opening by walk-in jurisdiction same like Montenegro and in 2022 even IBKR get's the deal and can't do much beside of rejecting such a transfer due to being Headquartered in the US.

I guess it's more the fact that too much Russian Money is based currently in Georgia and IBKR simply can't deal with it even when they want to - using the Substance Requirement excuse.

Do the same in the UAE which is technically even more Offshore then Georgia and no questions asked so it always depends on the general reputation of the country you are banking in as well.

 

[backpacker]

I made a deposit to IBKR from my offshore bank account at TBC in Georgia, and IBKR is now asking me for proof of residential address/office in Georgia. Strange thing is, I have made many deposits larger than this from the exact same bank account to IBKR in the past without problems.
Actually last year they sent me the same message, but custom service cleared it anyways after I explained my expat situation. I tried CS again this time, but now they say "International regulations are changing", so they don't allow foreign bank accounts unless I have residence/office there, and I must submit an update to my address.

Is this really true? Are we not allowed bank accounts in other countries?
Any recommendations on how to respond. I'm a bit scared they will perm close my account with my remaining funds .


Background: Expat living in Dubai for the last 15+ years, passport is from a large asian country. I have been using IBKR for 2+ years.

Thanks

In principle it is correct what IBKR told you. However, this much more a "Georgian" case than a "Global/Universal" one.
Georgia has significant problems to stay in good terms with FATF and other organizations. Many foreign banks are scared to accept funds from GE, especially if you do not have any ties to the country. You can read about it in this forum with multiple complaints about difficulties saending funds out of GE via SWIFT.

If you want to know more about the situation, start reading the following
-> According to Elene Khoshtaria, two US agencies published a document, which states that Georgia, along with other countries, is a sea-trade route for Russia-Belarus in order transport the sanctioned cargo
And something similar in posts #1054 till #1062 -> Russian President Putin announces military operation in Ukraine

 

[whoisthis344]

In principle it is correct what IBKR told you. However, this much more a "Georgian" case than a "Global/Universal".
Georgia has significant problems staybin good terms with FATF and other organizations. Many foreign banks are scared to accept funds from GE, especially if you do not have any ties to the country.

If you want to know more about the situation,astart trading the following
-> According to Elene Khoshtaria, two US agencies published a document, which states that Georgia, along with other countries, is a sea-trade route for Russia-Belarus in order transport the sanctioned cargo
And something similar in post #1054 till #1062 -> Russian President Putin announces military operation in Ukraine

Got it. That makes more sense, I'll read up on that. It's quite unfortunately this Russian thing had to happen right after I started doing offshore banking smoothly through Georgia. It's sad to see and at this rate, where are we headed in the next 10 years...

The reason for this request is that IBKR is not a Bank and follows usually the regulated Financial Institution - Bank the Account Holder is using.

Georgia is a famous account opening by walk-in jurisdiction same like Montenegro and in 2022 even IBKR get's the deal and can't do much beside of rejecting such a transfer due to being Headquartered in the US.

I guess it's more the fact that too much Russian Money is based currently in Georgia and IBKR simply can't deal with it even when they want to - using the Substance Requirement excuse.

Do the same in the UAE which is technically even more Offshore then Georgia and no questions asked so it always depends on the general reputation of the country you are banking in as well.

Yeah, actually my UAE situation is a bit unique. My official UAE employer pays much less than my online contractual work (that's paid through invoices to a EU entity).
And as you know, the UAE banks ask for your income source, and I don't have a freelance permit or a no-objection-letter from my employer. It's a bit of a grey area because UAE doesn't actively enforce these things.

I have AED accounts at ADIB and ADCB that I receive my UAE salary, but last time I tried FAB and Sharjah Islamic for a USD account it failed after I told them the amounts (~mid 6 figure USD) which didn't match my local situation.
Any other local banks you'd recommend? Is it likely they would open the account, and then freeze/bounce the transfer back?

 

[rowena]

I'm from Dubai like you and regularly deposit/withdraw high amounts to IB from my overseas accounts and never faced any problem.

It happened to you because Georgia is a high-risk country. You don't need a substance to have a personal account in any other country.

 

[Fred]

Got it. That makes more sense, I'll read up on that. It's quite unfortunately this Russian thing had to happen right after I started doing offshore banking smoothly through Georgia. It's sad to see and at this rate, where are we headed in the next 10 years...


Yeah, actually my UAE situation is a bit unique. My official UAE employer pays much less than my online contractual work (that's paid through invoices to a EU entity).
And as you know, the UAE banks ask for your income source, and I don't have a freelance permit or a no-objection-letter from my employer. It's a bit of a grey area because UAE doesn't actively enforce these things.

I have AED accounts at ADIB and ADCB that I receive my UAE salary, but last time I tried FAB and Sharjah Islamic for a USD account it failed after I told them the amounts (~mid 6 figure USD) which didn't match my local situation.
Any other local banks you'd recommend? Is it likely they would open the account, and then freeze/bounce the transfer back?

So it's time to setup your Dubai Company where you are the employeed General Manager, having Salary Certificate and everything else in place.

UAE is very smooth if structured right and a pain if not.

 

[JackAlabama]

I'm from Dubai like you and regularly deposit/withdraw high amounts to IB from my overseas accounts and never faced any problem.

It happened to you because Georgia is a high-risk country. You don't need a substance to have a personal account in any other country.

Correct. No problem here as well except with Georgia (post war). Anyone only halfway familiar with Georgia and their past and present had time to take appropriate action.

To @op, you can use local cryptocurrency exchanges in Georgia (mycoins and cryptal).

 

[zzzzzz]

I made a deposit to IBKR from my offshore bank account at TBC in Georgia, and IBKR is now asking me for proof of residential address/office in Georgia. Strange thing is, I have made many deposits larger than this from the exact same bank account to IBKR in the past without problems.
Actually last year they sent me the same message, but custom service cleared it anyways after I explained my expat situation. I tried CS again this time, but now they say "International regulations are changing", so they don't allow foreign bank accounts unless I have residence/office there, and I must submit an update to my address.

Is this really true? Are we not allowed bank accounts in other countries?
Any recommendations on how to respond. I'm a bit scared they will perm close my account with my remaining funds .


Background: Expat living in Dubai for the last 15+ years, passport is from a large asian country. I have been using IBKR for 2+ years.

Thanks

Personal or business brokerage/bank account?

 

[backpacker]

You don't need a substance to have a personal account in any other country.

This was correct until a decade ago. Times have changed.
If you send/receive significant amounts of money between private bank acounts in countries where you have no ties to, than you will -at the bare minimum- face a myriad of questions.

 

[Buttout]

IB had to beef up their compliance department in the last couple of years because they were previously one of the loosest brokers and got burned for it. Unfortunately as things go they over-corrected and compliance is now ridiculous. Hopefully they will readjust when management sees the percentage of bouncing transfers.

 

[gab1]

^ Exactly. 2 years ago they were fined a large sum for 'being too loose' as you put it.
They no longer allow using the account for currency exchange unless you show 'a non-currency trading activity proportional to your account size'. If not so, your deposits will be rejected and your account may be closed (their words).

These days IB can only be safely used for actual trading of stocks/futures etc.

 

[joffreylol]

^ Exactly. 2 years ago they were fined a large sum for 'being too loose' as you put it.
They no longer allow using the account for currency exchange unless you show 'a non-currency trading activity proportional to your account size'. If not so, your deposits will be rejected and your account may be closed (their words).

These days IB can only be safely used for actual trading of stocks/futures etc.

You have only used their currency convert tool and they told you that they are not going to allow it anymore?

 

[whoisthis344]

Personal or business brokerage/bank account?

Personal broker and bank account.

So it's time to setup your Dubai Company where you are the employeed General Manager, having Salary Certificate and everything else in place.

UAE is very smooth if structured right and a pain if not.

I considered that initially, but it seemed over-engineered since as a UAE resident I don't pay income tax anyways. Maybe I am uninformed here.

I took a look at your services, do you also offer paid consulting for advice on bank accounts/transfers/brokers etc.? Of course I understand nothing can be guaranteed here, but maybe I can learn from your experience. I can drop by your Dubai office and explain my situation.

IB had to beef up their compliance department in the last couple of years because they were previously one of the loosest brokers and got burned for it. Unfortunately as things go they over-corrected and compliance is now ridiculous. Hopefully they will readjust when management sees the percentage of bouncing transfers.

We can only hope for, but IB's hands may be forced now. It seems they recently settled a lawsuit with the SEC to beef up their compliance department that is run and overseen by a third party audit company.



On a side note, I also have a Saxo bank brokerage account. Do you guys reckon I would face the same problem as I did with IBKR cause of the war? I've previously transferred to Saxo from the same TBC Georgian account with no issues other than income proof. Are there any warning signs for Saxo you guys know of?

 

[fshore]

I made a deposit to IBKR from my offshore bank account at TBC in Georgia, and IBKR is now asking me for proof of residential address/office in Georgia. Strange thing is, I have made many deposits larger than this from the exact same bank account to IBKR in the past without problems.
Actually last year they sent me the same message, but custom service cleared it anyways after I explained my expat situation. I tried CS again this time, but now they say "International regulations are changing", so they don't allow foreign bank accounts unless I have residence/office there, and I must submit an update to my address.

Is this really true? Are we not allowed bank accounts in other countries?
Any recommendations on how to respond. I'm a bit scared they will perm close my account with my remaining funds .


Background: Expat living in Dubai for the last 15+ years, passport is from a large asian country. I have been using IBKR for 2+ years.

Thanks

Wire transfers have an address (with country) included with the senders name. So I don't quite get why they would ask for a Georgian address proof, if the address on the wire indicates that the sender lives in UAE.
Maybe this was a local type transfer and not a wire, or the bank sent the amount not from your name?
Or does the bank have your Georgian address on file?

 

[rowena]

This was correct until a decade ago. Times have changed.
If you send/receive significant amounts of money between private bank acounts in countries where you have no ties to, than you will -at the bare minimum- face a myriad of questions.

It is still correct. I use IB with my offshore bank accounts in countries where I have zero ties. I send and withdraw several million USD every year. I only work with big banks and they never questioned me for 5 years.

The bank account location is not the only trigger the compliance team checks. It depends on lots of things like your nationality, your business, your profile, etc...

 

[gab1]

You have only used their currency convert tool and they told you that they are not going to allow it anymore?

Upon trying to make a new deposit, the compliance department contacted me and explained as I described in my previous post.

Bottom line, they don't take kindly to people using them as a 'forex broker' or as some kind of a Wise alternative. Due to regulators beating down on them hard as of late.

 

[rowena]

Bottom line, they don't take kindly to people using them as a 'forex broker' or as some kind of a Wise alternative. Due to regulators beating down on them hard as of late.

This is the case with any bank or financial institution. You need to make profits for them and they will disturb you less.

 

[backpacker]

It is still correct. I use IB with my offshore bank accounts in countries where I have zero ties. I send and withdraw several million USD every year. I only work with big banks and they never questioned me for 5 years.

The bank account location is not the only trigger the compliance team checks. It depends on lots of things like your nationality, your business, your profile, etc...

Impressive.
You can count yourself to the World Elite when (big) banks are so lenient, considering the amounts you mentioned.