New rules on customer due diligence – FinCEN answers frequently asked questions about beneficial ownership

Description

Abstract: As a result of an action in May 2016 by the Financial Crimes Enforcement Network (FinCEN), financial institutions will be required to verify the identities of the beneficial owners of their legal-entity customers when the owners open new accounts. This article answers some questions regarding the new due diligence rules, such as which institutions are covered and who a beneficial owner is. The article also notes that banks should have a plan to ensure that the policies and procedures are in place to collect information about the beneficial owners of legal-entity customers.