BSA/AML Examiner Training Series 2

31 CFR Chapter X – Financial Crimes Enforcement Network (Continued)

Code

Failure of CIP to include procedures when customer’s identity is unknown Section 1020.220(a)(2)(iii) of the Treasury Department’s Bank Secrecy Act regulations requires that a covered financial institution’s Customer Identification Program must include procedures for responding to circumstances in which the covered financial institution cannot form a reasonable belief that it knows the true identity of a customer. This Section further specifies what these procedures should describe. Failure of CIP to include recordkeeping procedures Section 1020.220(a)(3) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution’s Customer Identification Program to include procedures for making and maintaining a record of all information obtained under the procedures implementing paragraph (a) of this Section. Failure to keep minimum CIP records Section 1020.220(a)(3)(i)(A) through (D) of the Treasury Department’s Bank Secrecy Act regulations specifies the minimum records under Section 1020.220 that must be maintained. Failure to keep CIP records for the required timeframes Section 1020.220(a)(3)(ii) of the Treasury Department’s Bank Secrecy Act regulations specifies the required retention period for records required under Section 1020.220. Failure of CIP to include procedures for determining if customer is on terrorist list Section 1020.220(a)(4) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution’s Customer Identification Program to include procedures for determining whether the customer appears on any list of known or suspected terrorists or terrorist organizations issued by any federal government agency and designated as such by the Treasury Department in consultation with the federal functional regulators. The Section further states that the procedures must require the covered financial institution to make such a determination within a reasonable period of time after the account is opened, and to follow all federal directives issued in connection with such lists. Failure of CIP to include procedures for providing adequate notice to customers Section 1020.220(a)(5)(i) of the Treasury Department’s Bank Secrecy Act regulations requires a covered financial institution’s Customer Identification Program to include procedures for providing customers with adequate notice that the covered financial institution is requesting information to verify their identities. Failure to meet certain conditions if relying on another institution to perform CIP Section 1020.220(a)(6) of the Treasury Department’s Bank Secrecy Act regulations requires certain conditions to be met, as specified by this Section, if a covered financial institution is relying on another financial institution, including an affiliate, to perform any procedures of its Customer Identification Program.

72,009

72,010

72,011

72,012

72,013

72,014

72,015

Revised 5/3/2023

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