Companies that rely on documents to verify customer identity, such as banks, must have appropriate agreements to outline the documents the banks will seek and exploit. This article details “primary and minor literature verification: prevention of illegal activities.”
Identity authentication documents specified by CIP regulations
The Customer Identification Program (CIP) specifies which documents can be used to verify the customer's identity. The rule reflects the expectations of federal banking institutions that the bank reviews the form of identity issued by the government that is not expired, proves the client's nationality or residence, and provides photographs or similar protections to most individual clients. Examples include a driver's license or passport.
On the other hand, if the bank allows the bank to establish a reasonable belief that it knows the true identity of the client, other types of identities can be used. Given the prevalence of forgery and illegal acquisition of papers, organizations should evaluate many documents to verify that it can establish a reasonable belief that it knows the true identity of the client.
Documents that establish legal existence of persons other than individuals (such as companies, partnerships or trusts) may include certified articles of association, under-completed government-issued commercial licenses, partnership agreements or trust instruments.
CIP-specified papers for verification
Banks that use record technology to verify customer identification must have a protocol that specifies which papers will be used. CIP regulations set out various papers traditionally considered as the primary source of identity and reflect the agency’s assumption that most clients will provide government-issued identities.
On the other hand, if the bank allows the bank to establish a reasonable belief that it knows the true identity of the client, other forms of identity can be used. Given the prevalence of forgery and illegal acquisition of papers, it is recommended that organizations search several documents to ensure they have a reasonable suspicion that they know the true identity of the client.
Backup CIP program
As a backup, the CIP must include any list of determines whether the customer is on a list of known or suspected terrorists or terrorist organizations of any federal government agency, and any list of whether the customer is determined in consultation with the federal functional regulator whether the customer is determined in a list of known or suspected terrorist or terrorist organizations.
The organization must perform this assessment within a reasonable time after the account is created, or if used in conjunction with the applicable list by another federal regulation, rules, or federal directive.
Under the rules, banks must also comply with any federal guidelines related to such listings. A separate guide will be provided to the bank on the list of necessary consultations for the purpose of the provision.
Rely on membership performance
The bank's CIP may include a designation when a bank will rely on the performance of another financial institution (including a member) whose organization's CIP involves any opening of the bank, or has opened, account or has established a similar formal bank or business relationship with other financial institutions, or other financial economic type, to establish a similar formal bank or business relationship with other financial institutions in a fair situation (i.e., fair interaction) with other financial institutions.
The second dependent financial institutions are regulated by federal functional regulators and are subject to the implementation of 31 USC 5318(h); 42, other financial institutions have signed a contract requiring them to show the bank annually that they have implemented the AML program and that they will fulfill (or make the agent complete) the bank's CIP requirements.
The final thought
If a company relies on papers to verify the identity of a client, an agreement must be made to find out the documents the bank will seek and use. This article details “primary and minor literature verification: prevention of illegal activities.”
