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What are the specific requirements regarding verification of the identity of new customers in the USA PATRIOT Act?

1) Customer identification program
2) Customer due diligence
3) Enhanced due diligence
4) All of the above

User Monopoint
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1 Answer

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Final answer:

The USA PATRIOT Act requires financial institutions to implement a Customer Identification Program, Customer Due Diligence, and Enhanced Due Diligence for new customer identity verification. This act has been a subject of debate regarding the extent to which it affects individual rights in the name of national security.

Step-by-step explanation:

The USA PATRIOT Act, which stands for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, outlines specific requirements for the verification of the identity of new customers. Among these requirements are:

  • Customer Identification Program (CIP): Financial institutions must obtain, verify, and record information that identifies each person who opens an account.
  • Customer Due Diligence (CDD): Financial institutions are required to collect and maintain information on customer profiles, including the nature and purpose of customer relationships.
  • Enhanced Due Diligence (EDD): For customers that present a higher risk, such as those with large volumes of assets, institutions must perform additional checks and monitoring.

The PATRIOT Act expands the federal government's ability to conduct surveillance and gather information, raising concerns about the balance between national security and individual rights.

User Siddaram H
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