CIP for Non-resident Alien Sole Proprietorship

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Question:

Our CIP policy states that for a sole proprietorship, we CIP only the owner following our consumer CIP procedures. Our consumer CIP procedures permit account opening for a non-resident alien without a TIN, and with a signed W-8. What are the requirements if a non-resident alien wants to open an account for a sole proprietorship? Do we not open the account if the owner does not have a social security number?

Answer:

It is possible to open this account, but it appears that your bank's CIP policies and procedures need to be up-dated to include this particular scenario. How you open this account must be clearly outlined in your procedures, so your employees and regulators understand the process. In lieu of a social security number, the CIP rules allow banks to accept a passport number with country of issuance, alien identification card number with country of issuance, or any other government issued document evidencing nationality or residence with a photograph.

It is also important that your procedures explain how you will conduct verification of a non-resident alien. One method is to rely on documents mentioned above to form a reasonable belief you know the true identity of the customer. The CIP rules allow these documents to satisfy both the source of customer information (Identification Number) as well as proof of verification.

First published on BankersOnline.com 6/19/06