USA Patriot Act/Patriot Act Compliant Background Screening
Following 9/11, the US signed into enactment - The USA Patriot Act of 2001 to strengthen and support Homeland Security to combat terrorism within the United States.
One aspect of the USA Patriot Act requires financial institutions to match their existing and potential customers against the Office of Foreign Control (OFAC) list of suspected terrorists entities and individuals and other "watch lists". Homeland Security now requires customer identification programs are now required of virtually all US. financial institutions including banks, mutual funds, credit unions and securities dealers. This also includes anyone involved in cash transactions over $10,000.00. The key to compliance with this law is to “know your customer.”
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More about the Patriot Act
Section 326 of the USA Patriot Act, in summary, calls for the following:
- Verifying the identity of any person seeking to open an account, to the extent reasonable and practicable;
- Maintaining records of the information used to verify the person’s identity, including name, address, and other identifying information; and
- Determining whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency.
What does this mean for financial institutions?