CIP Process – Gathering Client Information
The first step in the overall CIP Process is to gather information about a new customer during the customer onboarding phase.
Each banking or non-banking financial firm needs to ensure that it has adequate procedures and processes in place. Having well-defined procedures allows AML or other compliance supporting staff to quickly identify the information and documentation that needs to be obtained.
In addition to US financial regulators, governments across the world have their respective anti-money laundering laws and regulations that govern the type of documentation required to conduct KYC reviews.
Minimum Identifying Information
Section 326 (the CIP Rule) of the USA PATRIOT Act outlines a list of “minimum” identifying information that new customers will be required to provide.
For individuals, financial services firms need to collect:
(1) The name of the person opening the account
(2) The date of birth of the individual
(3) The individual’s residential or business street address
- Note: Post office boxes are not accepted. In the event that a person has no physical address, the below can act as a substitute:
- Fleet post office box number
- Military post office box number
- Residential address of the individual’s next of kin
(4) Identification number
- Social Security numbers for US individuals (Individual Taxpayer Identification can also act as a substitute)
- Non-US individuals can provide their passport numbers and countries of issuance, alien registration numbers or the numbers and countries of issuance of any other government-issued document proving nationality or residence and bearing a photograph
For legal entities (corporations, non-profit entities, LLCs, etc.), financial services firms need to collect the minimum identifying information listed below:
(1) Business or legal entity name
(2) The physical address of the business
(3) Country of registration/operations
(4) Identification number:
- Employer Identification Number (EIN) & legal registration document
- Taxpayer Identification Number (TIN)
- Individual Taxpayer Identification Number (ITIN)
Customer Info
For those non-US legal entities that possess none of the above, the below can serve as an alternative:
- A government-issued certification that validates the existence of the legal entity
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Other Identifying Information
In addition to the above list of “minimum” identifying information stipulated by federal regulators, financial firms can also collect the below information and documentation based on the client type and type of financial product/service to be provided:
- Prospectus
- Certified articles of incorporation
- Certificate of formation or memorandum
- Articles of association or other documents proving formation
- Certificate of good standing, if applicable
- Ownership structure information
- Offering memorandum
- Plan agreement
- Private placement memorandum
Continue: CIP Process – Verifying the Customer’s Identity (Phase 2)
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