Knowing your customer

[R. A. Hettinga]

At 10:29 AM -0500 on 12/7/00, Trei, Peter wrote:


> Green carders, yes. Visiting foreigners who are not
> working, not neccesarily. Tourists certainly not.
>
> How about if James Higginsbottom opens an account
> in the London branch of Citibank? Does he need a US
> SSN to do so? (I don't think so). Can he use the account
> in the US (I suspect he can).

I think we're wandering off into the weeds a bit here.

The London branch of Citibank, is, of course, a bank in the UK, subject to
all banking laws there.

Our friend above uses his UK account in the US almost certainly at an ATM
machine, like I do from my US bank in the UK, and/or credit card, and no
other way. You can certainly get a dollar-denominated bank account in
London from Citibank, London is the currency capital of the world, but, and
on no real data here, I doubt you could write ACH cleared and routed checks
through it. NACHA is trying to do this better, but, in general, you need a
correspondent relationship, and/or account, or something, at a bank here in
order to write checks on that UK account.

My original point, possibly taken too literally at the outset here, is that
in most jurisdictions it is more or less impossible to get a US bank
account without a social security number, especially if you're a US
citizen. Duncan Frissell popped up here on cypherpunks with pointers to the
odd bank in South Dakota or somewhere, 4 or 5 years ago, where you could
get a bank account without a SSN. It was exceptional in its example, and I
would doubt it possible even now.

I am not, of course, a banking lawyer, but I certainly hang out with enough
of those folks these days, I've certainly had enough of this stuff shoved
into my head over the years, and, I expect that to get a bank account
without a Social Security number in most states of the US, you probably
need to prove that you are indeed a foreign national, *and* provide a valid
passport as proof of same, and that, frankly, the passport number would be
used *somewhere* as a proxy for SSN where possible.

There ain't no free lunch as far as identity and book-entry settlement
goes, anymore, folks, even in "tax-haven" jurisdictions, as we're now
seeing.

Modern nation-states have bound up so much of their regulatory and tax
structure into book entry settlement, that it is very hard, more probably
impossible, to get a bank account in this country without being completely,
positively, whatever that means, identified -- biometrically identified, if
it were cheap enough, and certainly with a state-issued identification
number.

To paraphrase Doug Barnes, "and then you go to jail" is the penultimate
error-handling step in book-entry settlement. That means that the
nation-state gets in your face, and gets your number, end of story.

That is a central fact of financial operations won't change until something
proves cheaper that book-entry settlement. Which, of course, lots of people
on cypherpunks, and elsewhere, are busy working on.

Cheers,
RAH
-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'