Customer Identification Program

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According to FATF recommendations, all financial institutions must have a Customer Identification Program (CIP) appropriate to the size and type of its business.The CIP must be incorporated into the bank's Bank Secrecy Act/Anti-money laundering compliance program, which is subject to approval by the financial institution's board of directors.

[edit] Requirements

The CIP is intended to enable the bank to form a reasonable belief that it knows the true identity of each customer. The CIP must include new account opening procedures that specify the identifying information that will be obtained from each customer. It must also include reasonable and practical risk-based procedures for verifying the identity of each customer. Financial institutions should conduct a risk assessment of their customer base and product offerings, and in determining the risks, consider:

  • The types of accounts offered
  • The methods of opening accounts.
  • The types of identifying information available
  • The institution's size, location, and customer base

[edit] References

This entry was originally based on the information provided on the site Improving New Account Opening [1]

Guidance information for banks is provided by the FFIEC in their BSA/AML InfoBase [2]

Information for varies for other types of institutions. For insurance companies, the state regulations must be addressed and securities dealers must meet their self governing body, such as NASD [3]

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