What are the PATRIOT Act and FinCEN Requirements?

What are the PATRIOT Act and FinCEN Requirements?

 

In 2001, the USA PATRIOT Act was passed to give law enforcement additional tools to investigate terrorism and money laundering. As a financial institution, Fattmerchant is required to collect personal information on authorized agents and owners of any business that applies for a membership with us.

Section 326 of the PATRIOT Act requires that we perform an ID verification on all agents and owners of applying accounts and check their personal information against government databases. This is to prevent known or suspected terrorists from gaining access to a merchant account that would allow for potential funding of terrorism.

In May 2016, FinCEN (Financial Crimes Enforcement Network) published Customer Due Diligence Requirements for Financial Institutions. The Requirements are commonly referred to as “Beneficial Ownership.” Compliance with the ​Rule is required as of May 11, 2018. The FinCEN requirements expand the scope of the PATRIOT Act by including anyone that owns 25% equity in the business or more in the ID verification process.

Every merchant must provide information for zero to four Beneficial Owners and one Control Owner. When appropriate, the same individual can be identified as both a Beneficial and Control Owner. Fattmerchant will collect the following information from all individuals identified as either a Beneficial Owner or a Control Owner:

● Name
● Address
● Date of Birth
● Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

For Beneficial Owners who do not have an SSN or ITIN, a passport number (or similar government ID) will be collected. This information is the minimum of what is required to be collected per the Rule.

We understand the sensitive nature of this information and will never share it or use it outside of the procedures described here.

For more information, please see the announcement on the U.S. Treasury site here: https://www.fincen.gov/news/news-releases/fincen-reminds-financial-institutions-cdd-rule-becomes-effective-today