U.S. Treasury: Beneficial Ownership AML rules to require updating customer ID programs
The U..S. Treasury's Financial Crimes Enforcement Network (FinCEN) recently issued final rules for customer due diligence requirements requiring the identification of beneficial owners of legal entity customers. Allowing owners or controllers of legal entities to remain anonymous may facilitate hiding proceeds of illegal activities in the financial system.
The new rules announced in May are meant to help prevent the anonymity and possible evasion by strengthening customer identification and monitoring. According to National Law Review contributors Frank A. Mayer III, Richard M. Berman, and Jonathan L. Levin, there are steps financial institutions may take to prepare for future compliance. Some of these include checking current CIP practices against the new rules, creating beneficial owner identification practices, and enhancing account maintenance to align with new identity verification requirements. The compliance date for the new rules is May 11, 2018.
Citations: 81 FR 29398-01, 2016 WLNR 14399277
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