US Treasury Seeks To Increase Money Laundering Controls For Banks

by Mike Godfrey, Tax-News.com, Washington

22 July 2002

The US Treasury Department announced last week that banks and other financial institutions will be required to verify the identities of customers and keep records of the forms of identification used to do this, under new proposals which are set to become part of Section 326 of the Patriot Act following a 45 day consultation period.

Banks, savings associations, securities and commodities brokers, mutual funds, credit unions and private banks will also be required to verify that their customers are not included on 'any list of known or suspected terrorists or terrorist organizations', according to the Treasury.

For businesses seeking to open accounts in the United States, financial institutions will be obliged to obtain the taxpayer identification for the business, and to verify the identity of officers empowered to sign business checks.

For individual US citizens, taxpayer identification or social security numbers and birth dates should be asked for, and for non-residents, documentation such as passports or alien numbers will be requested under the proposed rules.

Speaking to reporters last week, Treasury Department General Counsel, David Aufhauser announced that:

'This alone is not a sufficient step, but it's an absolutely necessary step.' He added: 'Section 326 is really the least we can expect of financial institutions. It simply asks them to verify the identity of persons who are seeking to do business with them.'

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