30 April 2003
New Customer Identification Rules Target Terror Financing
(Treasury implements Patriot Act provisions against terror, money
The U.S. Treasury has issued final rules that require certain
financial institutions to establish procedures to verify the identity
of new account holders.
In an April 30 news release, Treasury said the regulations were
written to prevent money laundering, terrorist financing, identity
theft and other forms of fraud "while also providing financial
institutions the flexibility they need to effectively implement the
The rules are part of the Bush administration's ongoing work to
implement the Patriot Act, legislation passed by Congress in the wake
of the September 2001 terrorist attacks against the United States.
The customer identification standards will take effect October 1 and
apply to a range of financial institutions and service providers,
including banks and trust companies, savings associations, credit
unions, mutual funds, and securities brokers and dealers, Treasury
Institutions will be required to establish a program for obtaining
identifying information from customers opening new accounts, such as
the customer's name, address, date of birth and a taxpayer
identification number, or -- for non-U.S. customers -- a similar
number from a government-issued document.
The full text of the rules is available on the Treasury web site at:
Following is the text of the Treasury news release:
U.S. Department of the Treasury
Office of Public Affairs
April 30, 2003
Treasury and Federal Financial Regulators Issue Final
Patriot Act Regulations on Customer Identification
The Department of the Treasury, the Financial Crimes Enforcement
Network, and the seven federal financial regulators today issued final
rules that require certain financial institutions to establish
procedures to verify the identity of new accountholders.
The rules announced today were developed jointly by the Treasury
Department, Treasury's Financial Crimes Enforcement Network, and the
seven federal functional regulators, including the Board of Governors
of the Federal Reserve System, the Commodity Futures Trading
Commission, the Federal Deposit Insurance Corporation, the National
Credit Union Administration, the Office of the Comptroller of the
Currency, the Office of Thrift Supervision, and the Securities and
These regulations are part of the Administration's continuing work to
implement the USA Patriot Act and prevent money laundering, terrorist
financing, identity theft, and other forms of fraud while also
providing financial institutions the flexibility they need to
effectively implement the rules.
These final regulations implement section 326 of the USA PATRIOT Act,
which directs that regulations be issued requiring that financial
institutions implement reasonable procedures to (1) verify the
identity of any person opening an account; (2) maintain records of the
information used to verify the person's identity; and (3) determine
whether the person appears on any list of known or suspected
terrorists or terrorist organizations.
The regulations apply to banks and trust companies, savings
associations, credit unions, securities brokers and dealers, mutual
funds, futures commission merchants, and futures introducing brokers.
Institutions subject to the final rules will be required to establish
a program for obtaining identifying information from customers opening
new accounts. The regulations will require that institutions implement
procedures for collecting standard information such as a customer's
name, address, date of birth and a taxpayer identification number (for
U.S. persons, typically a social security number and for non-U.S.
persons, a similar number from a government-issued document).
A financial institution's program is also required, among other
things, to contain procedures to verify the identity of customers
within a reasonable period of time. Many financial institutions may
rely on examining standard identification such as a driver's license
or passport. However, the final rule gives financial institutions the
flexibility to implement procedures to verify identity in other ways
appropriate to their individual circumstances.
Financial institutions will have until October 1, 2003, to come into
full compliance. Publication of the final rules in the Federal
Register is expected to occur later this week.
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)