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Proposed Rules on Customer Identification Programs Issued for Certain Financial Institutions

August 01, 2002

By Investment Management & White Collar Defense Practice Groups

As we have previously advised you, the USA PATRIOT Act of 2001,1 through its amendment of certain anti-money laundering provisions of the Bank Secrecy Act, requires every “financial institution,” including banks (including credit unions, savings associations, private banks, and trust companies), investment companies, broker-dealers, futures commission merchants and introducing brokers to implement a customer identification program. The Program must, at a minimum, provide reasonable procedures for: (1) verifying the identity of any person seeking to open an account to the extent reasonable and practicable when accounts are opened; (2) maintaining records of the information used to verify a person’s identity; and (3) consulting government lists of known or suspected terrorists or terrorist organizations provided to the financial institution to determine whether a person seeking to open an account appears on any list.