THE CUSTOMER IDENTIFICATION PROGRAM UNDER THE U.S. PATRIOT ACT

In October 2001, the U.S. Congress passed the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act,” known as the USA PATRIOT Act. USA Patriot Act has two main purposes among others. The first purpose is to deter and punish terrorist acts in the United States and around the world; and the second purpose is to enhance law enforcement investigatory tools in the U.S. The Act is far-reaching and places numerous requirements on financial institutions and their trust departments. For instance, U.S. and foreign banks must develop policies and procedures to ensure that trust departments comply with provisions of the Patriot Act and other anti-money laundering (AML) regulations. This article defines the Customer Identification Program (CIP) under the USA Patriot Act and the companies that must comply with CIP; explains whether individuals have to comply with CIP provisions; clarifies whether CIP is applicable to cash or all type of deposits; and provides examples of those documents that may be provided to comply with the CIP program.

The following questions have been addressed in this article:

What companies must have CIPs (Customer Identification Programs)?
Does the CIP rule apply only to individuals who open accounts?
Does the CIP rule only pertain to accounts where money is deposited?
What does Section 351 of the US Patriot Act state?
What documents should one take to the bank for Customer Identification Programs?

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