By PAUL O’DONOGHUE, Senior Correspondent
FINCEN has officially cleared U.S. banks to collect Tax Identification Number (TIN) details from a third party, rather than from the bank’s customer.
The organization, the AML unit of the U.S. Department of the Treasury, said the exemption will apply as long as banks comply with other CIP (Customer Identification Program) rules.
“[This] provides banks with greater flexibility in fulfilling compliance obligations,” said a new FinCEN order.
“This exemption, when used appropriately, would be consistent with safe and sound banking.”
A TIN is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws.
Previously, U.S. banks had to directly ask customers for their TIN number.
FinCEN TIN changes
The move was first announced by FinCEN in June.
The watchdog said banks must still use CIP procedures that enable them to “form a reasonable belief that it knows the true identity of each customer”.
The CIP Rule requires written procedures that:
- Enable the bank to obtain TIN information prior to opening an account
- Are based on the bank’s assessment of the relevant risks
- Are risk-based for the purpose of verifying the identity of each customer to the extent “reasonable and practicable”
The change applies to organizations regulated by the Office of the Comptroller of the Currency. It also applies to those regulated by the Federal Deposit Insurance Corporation, and the National Credit Union Administration.
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