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Financial Institutions Get Final Rules for Client Identification
Insight on the News, May 27, 2003
Byline: Jennifer G. Hickey, INSIGHT
Financial Institutions Get Final Rules for Client Identification
Since the U.S. military struck Afghanistan and Iraq at least two sources of terrorist financing have been contained, but insidious forces continue to open, maintain and use bank accounts around the world. In its effort to implement money-laundering regulations included in the USA PATRIOT Act of 2001, particularly those outlined in section 326, the Treasury Department now has issued final rules for financial institutions pertaining to customer identification and verification.
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As outlined by Treasury, the rules require financial institutions to establish a customer-identification program (CIP) to collect data on new account holders, verify that the information is accurate, maintain records of the collected background/verification data and check the depositor's name and data against an official terrorist watch list. Before opening an account, most depositors would be required to provide their name, address, date of birth and government-issued documentation verifying their identity and status as a taxpayer. For most citizens, a Social Security number would suffice, while non-citizens would need to produce a similar number from a government-issued document.
However, the final rules also contain a provision permitting banks, securities brokers, credit unions and other included institutions to rely on "another regulated U.S. financial institution to perform any part of the financial institution's CIP."
The rules were drafted jointly by the Treasury Department and eight other government agencies, including Treasury's Financial Crimes Enforcement Network, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Principi Defends Funding for Vets
The claims may not be as false as those made by spammers, but Veterans' Affairs Secretary Anthony Principi recently took issue with a meaty assertion circulating around the Internet, emanating from irate callers on C-SPAN and being repeated by politicians and pundits alike. In the Democratic response to the president's weekly radio address, Maryland Rep. Elijah Cummings falsely said, "The Republican budget says that tax cuts for the wealthy are more important than taking care of our veterans, who fought for the freedom of our country." A month earlier, Rep. George Miller (D-Calif.) likewise had contended that the GOP budget cut veterans programs by $15 billion over 10 years.
But the continued barrage of politically loaded inferences - Republicans cutting veterans' assistance in a time of war - was being watched
by Principi, who noted in a press
release that "a lie can get halfway around the world before the truth
can even find its socks." He said that, if any cuts were made, veterans and their families should be concerned,
but declared that none were made in his agency. In the fiscal year 2004budget, Principi notes, a record $63.6 billion was requested, a discretionary spending increase of 8 percent over the previous fiscal year.
The confusion, intended or otherwise, might have been fueled by a parliamentary move that occurred when the House debated a resolution requesting an across-the-board cut of 1 percent for all federal agencies.
If the resolution had passed, Principi said, the budget increase would have been smaller but could not in any case have been considered a cut.
Principi's comments can be found at www.va.gov.
FTC Takes on Spam, Scams in Cyberspace
The e-mails offer everything from diet cure-alls and genitalia grande to spam blockers, but as many Internet users are aware unsolicited e-mail is a growing annoyance. While the commonwealth of Virginia recently passed the toughest antispam laws to date, the federal government also is taking action to fry spam and reduce spamming. On April 30, the Federal Trade Commission (FTC) convened its first forum on spam at which it released a report analyzing the veracity of claims made in 1,000 unsolicited commercial e-mails. These e-mails were drawn randomly from a pool of 11 million messages either forwarded to or received in FTC in-boxes.
An FTC analysis of the selected spam found 44 percent contained false information in the "From" and "Subject" lines. An astonishing 90 percent of spam concerning investment and business opportunities contained likely false claims.
As fraudulent as spam may be, auction fraud is the single-largest category of Internet-related complaints, said the FTC in announcing a law-enforcement crackdown targeting Internet auction scams. On April 30, the agency said its Operation Bidder Beware initiative has resulted in 57 criminal and civil actions to date. According to the FTC's Consumer Sentinel Database, more than 51,000 complaints were logged in 2002. The FTC and 29 state attorneys general also have launched a new consumer-awareness campaign aimed at giving individuals more information on violators and tips on how to protect personal financial information and verify the legitimacy of auctioneers and their products. More information can be found on the FTC Website (www.ftc.gov) or by calling 1-877-FTC-HELP.
