-> SNETNEWS Mailing List I just keep wondering how much more of this crap we are going to let them shove down our throats ?! Mark ====================================================================== SCAN THIS NEWS 1/14/99 The material that follows is taken straight from the web pages of the Financial Actions Task Force (FATF), the international organization that is forcing all U.S. banks to develop identification and monitoring systems so that the banking transactions of every American can be monitored. A link to the FATF web page is included below. (The term "member," when used in their documents, means any country that is a member of the Global-7 organization.) In the U.S., the FDIC and the Federal Reserve Banking System are among the federal agencies currently in the process of instituting these "Know Your Customer" requirements in the form of regulations. Read what the consequences will be for those who rebel under the KYC rules: severed banking relationships; blocked bank accounts; suspicious transaction reports being filed; forfeited accounts... And, for the bankers who won't comply with KYC rules: fines for individuals and the possibility of imprisonment... --------------------------------------------------------------- EVALUATION OF MEASURES TAKEN BY FATF MEMBERS DEALING WITH CUSTOMER IDENTIFICATION http://www.oecd.org/fatf/evaluati2.htm Introduction 1. This paper presents a synthesis of measures taken by FATF members in relation to customer identification requirements and record-keeping rules. It deals with both the identification regime set up by members and the practical problems which may have arisen. 2. The "know your customer" policy is probably the cornerstone of the forty FATF Recommendations. While all members have generally implemented the Recommendations dealing with customer identification and record-keeping, there is a need to examine the effectiveness of the identification regimes in place and to see whether some refinements are necessary in order to solve the problems encountered in the most difficult situations by financial institutions. 3. The paper first describes the customer identification and record-keeping systems in FATF members. It then addresses specific issues such as anonymous accounts, identification of the beneficial owner, identification in cases where there is no face-to-face contact between the customer and the financial institution, and future challenges linked to the development of new technologies in electronic payments such as stored value cards. Finally, the conclusion will endeavour to provide an overall assessment of the effectiveness of identification regimes and their impact on money laundering activities. ---- [snip] --- (iv) Compliance (a) Measures in case of failure of identification - 27. When the customer has not been adequately identified, various measures can be taken by the relevant institutions: * sever the relationship with the customer (including refusal to open the account or refuse the transaction; * block the account from withdrawals; * make a suspicious transaction report; * possible forfeiture of the account after a certain period of time; * keep the record of the data concerning the identification. 28. The above-mentioned measures can apply either separately or together. For instance, after an account has been opened, a financial institution may block the funds and simultaneously make a suspicious transaction report. However, this position has been subject to criticism as incompatible with the principle of good faith in business relations. 29. For most members, in no circumstances should transactions be permitted on a account before the customer's identity has been established. However, financial institutions may discover later that the identification checks were not satisfactorily completed. In this case, the institutions should, as a minimum, be required to disclose information to the relevant authorities. This issue of severing business relations at this stage is nevertheless questionable. In fact, it is important to keep an audit trail in all cases and not to authorise withdrawals in cash. (b) Sanctions for non compliance with identification requirements 30. The sanctions applicable to the institutions in cases of non compliance with respect to customer identification are as follows: * fines for individuals, companies and financial institutions; * the possibility of imprisonment for individuals (members of the board, directors, managers, employees, representatives or other persons who permanently or occasionally render services to them); * disciplinary sanctions (warning, suspension of activity, or withdrawal of agreement in most serious cases); * rectification of any weaknesses in customer identification as identified in the banking supervisory process; * cease and desist, removal and prohibition and other such actions. 31. Again, the above-mentioned sanctions can be applied either in conjunction or separately. In many members, it is a criminal offence for an institution to fail to take reasonable measures to establish the identity of a prospective customer. Sometimes, not only the institutions but also their employees can be punished by fines and imprisonment according to their involvement in the offence and their position in the bank. -------------------------------------------------- If you wish to object to this becoming the general practice for all banking activity in America, send your objections to either, or both, of the following agencies: -------------------------------------------------- FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) Comments must be received by March 8, 1999. DOCID:fr07de98-22 RIN 3064-AC19 Mailing address: Robert E. Feldman Executive Secretary Attention: Comments/OES Federal Deposit Insurance Corporation 550 17th Street, N.W. Washington, DC 20429. In addition, comments may be sent by fax to (202) 898-3838, or by electronic mailto:[EMAIL PROTECTED]. Comments may be inspected and photocopied in the FDIC Public Information Center, Room 100, 801 17th Street, NW, Washington, D.C., between 9 a.m. and 4:30 p.m., on business days. FOR FURTHER INFORMATION CONTACT: Carol A. Mesheske, Special Activities Section, Division of Supervision, (202) 898-6750, or Karen L. Main, Counsel, Legal Division (202) 898-8838. --------------------------------------------- FEDERAL RESERVE SYSTEM (FRS) Comments must be received by March 8, 1999. DOCID:fr07de98-20 Docket No. R-1019 Mailing address: Jennifer J. Johnson, Secretary, Board of Governors Federal Reserve System 20th and Constitution Avenue, N.W. Washington, D.C. 20551. Comments received will be available for inspection in Room MP-500 of the Martin Building between 9:00 a.m. and 5:00 p.m. weekdays, except as provided in 12 CFR 261.14 of the Board's Rules Regarding Availability of Information. FOR FURTHER INFORMATION CONTACT: Richard A. Small, Assistant Director, Division of Banking Supervision and Regulation, (202) 452-5235 or Pamela J. Johnson, Senior Anti-Money Laundering Coordinator, Division of Banking Supervision and Regulation, (202) 728-5829. For users of Telecommunications Devices for the Deaf (TDD) only contact Diane Jenkins, (202) 452-3544, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. ======================================================================= Don't believe anything you read on the Net unless: 1) you can confirm it with another source, and/or 2) it is consistent with what you already know to be true. ======================================================================= Reply to: <[EMAIL PROTECTED]> ======================================================================= To subscribe to the free Scan This News newsletter, send a message to <[EMAIL PROTECTED]> and type "subscribe scan" in the BODY. Or, to be removed type "unsubscribe scan" in the message BODY. For additional instructions see www.efga.org/about/maillist.html ----------------------------------------------------------------------- "Scan This News" is Sponsored by S.C.A.N. Host of the "FIGHT THE FINGERPRINT!" web page: www.networkusa.org/fingerprint.shtml ======================================================================= -> Send "subscribe snetnews " to [EMAIL PROTECTED] -> Posted by: "Mark A. Smith" <[EMAIL PROTECTED]>
