will be checking account holders status
09/25/2003: Change of ID Documents Requirement for Account Opening/Transactions for Aliens
Today, the U.S. Department of Treasury released a rule that affects acceptability of consular issued ID documents for financial transactions by the aliens. On May 9, 2003, the Department of the Treasury (Treasury), through the Financial Crimes Enforcement Network (FinCEN), together with the federal functional regulators, jointly issued final rules implementing section 326 of the Act.\1\ The final rules require banks, securities broker-dealers, mutual funds, and futures commission merchants and introducing brokers to establish reasonable procedures for the identification and verification of new accountholders. These rules became effective on June 9, 2003, although financial institutions have until October 1, 2003 to come into compliance.
On July 1, 2003, Treasury published a Notice of Inquiry seeking additional comment on two discrete aspects of the final rules: (i) Whether and under what circumstances financial institutions should be equired to retain photocopies of identification documents relied on to verify customer identity; and (ii) whether there are situations when the regulations should preclude reliance on certain forms of foreign government-issued identification to verify customer identity.
The rule which is published today answers to this questions as follows: (1) Treasury remains persuaded, as it was at the conclusion of the rulemaking process, that requiring photocopies of identification documents is not an appropriate requirement to impose. While individual financial institutions may well determine that it is prudent to photocopy identification documents in some instances, an across-the-board requirement is inconsistent with the risk-based approach of the final rules and is not warranted. (2) The divergence of opinion concerning the relative security of consular identification cards demonstrates the difficulties associated with drafting a rule thatwould purport to specify ``unacceptable'' documents. And, given the wide array of identity documents available, the security and reliability of which is constantly changing, it makes little sense from a regulatory perspective to specify individual types of documents that cannot be used within the regulation itself. Any such list would inevitably be quickly out of date and may provide financial institutions with an unwarranted sense of security about documents that are not prohibited. Treasury is committed to protecting the financial system from abuse by those seeking to finance terrorism or commit financial crimes. This commitment includes providing financial
institutions with information relating to the security and reliability of identification cards. Treasury will use appropriate methods, both formal and informal, to ensure that such information is collected and shared with the financial community to assist them in verifying the identity of their customers.
Treasury expects all financial institutions covered by the customer identification regulations to have their customer identification program drafted and approved by October 1, 2003. For the full text, please click here.
09/25/2003: Change of ID Documents Requirement for Account Opening/Transactions for Aliens
Today, the U.S. Department of Treasury released a rule that affects acceptability of consular issued ID documents for financial transactions by the aliens. On May 9, 2003, the Department of the Treasury (Treasury), through the Financial Crimes Enforcement Network (FinCEN), together with the federal functional regulators, jointly issued final rules implementing section 326 of the Act.\1\ The final rules require banks, securities broker-dealers, mutual funds, and futures commission merchants and introducing brokers to establish reasonable procedures for the identification and verification of new accountholders. These rules became effective on June 9, 2003, although financial institutions have until October 1, 2003 to come into compliance.
On July 1, 2003, Treasury published a Notice of Inquiry seeking additional comment on two discrete aspects of the final rules: (i) Whether and under what circumstances financial institutions should be equired to retain photocopies of identification documents relied on to verify customer identity; and (ii) whether there are situations when the regulations should preclude reliance on certain forms of foreign government-issued identification to verify customer identity.
The rule which is published today answers to this questions as follows: (1) Treasury remains persuaded, as it was at the conclusion of the rulemaking process, that requiring photocopies of identification documents is not an appropriate requirement to impose. While individual financial institutions may well determine that it is prudent to photocopy identification documents in some instances, an across-the-board requirement is inconsistent with the risk-based approach of the final rules and is not warranted. (2) The divergence of opinion concerning the relative security of consular identification cards demonstrates the difficulties associated with drafting a rule thatwould purport to specify ``unacceptable'' documents. And, given the wide array of identity documents available, the security and reliability of which is constantly changing, it makes little sense from a regulatory perspective to specify individual types of documents that cannot be used within the regulation itself. Any such list would inevitably be quickly out of date and may provide financial institutions with an unwarranted sense of security about documents that are not prohibited. Treasury is committed to protecting the financial system from abuse by those seeking to finance terrorism or commit financial crimes. This commitment includes providing financial
institutions with information relating to the security and reliability of identification cards. Treasury will use appropriate methods, both formal and informal, to ensure that such information is collected and shared with the financial community to assist them in verifying the identity of their customers.
Treasury expects all financial institutions covered by the customer identification regulations to have their customer identification program drafted and approved by October 1, 2003. For the full text, please click here.