CHAPTER5

Know Your Customer and Customer Identification Program

The Importance of KYC/CIP

One of the first questions that I get from new jacks (new personnel) in the anti-money laundering (AML) industry is, “What is the difference between CIP and KYC?” The answer is that there is no difference. For the most part, the terms are used interchangeably. Know your customer (KYC) has been around for a while, and customer identification program (CIP) became common when it was mentioned in the USA PATRIOT Act. I have heard that CIP sounded less intrusive to the average customer than KYC, and that is why the term CIP was introduced. That sounds possible. (If not, it is a great line of baloney that someone came up with.)

That being said, allow me to provide ...

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