A requirement to identify and verify the beneficial owners of a legal entity customer each time the customer opens a new account has been removed for some banks by the Treasury’s financial crimes enforcement arm, it said Friday.
The order issued by the Financial Crimes Enforcement Network (FinCEN) grants exceptive relief to covered financial institutions from some requirements of the agency’s Customer Due Diligence Requirements for Financial Institutions rule (the “2016 CDD Rule”).
The action by FinCEN, according to the agency, is part of its “commitment to modernizing the Bank Secrecy Act (BSA) framework while maintaining strong safeguards against illicit finance.”
FinCEN said the order requires a financial institution to identify and verify the beneficial owners of a legal entity customer only when:
- a legal entity customer first opens an account with the institution;
- the institution has knowledge of facts that reasonably call into question the reliability of previously obtained beneficial ownership information; and
- as otherwise required based on the institution’s risk-based procedures for ongoing customer due diligence.
“Notwithstanding this exceptive relief, covered financial institutions must comply with all other applicable anti-money laundering/countering the financing of terrorism requirements under the Bank Secrecy Act, including the obligation to conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information,” FinCEN said.
FinCEN Issues Exceptive Relief to Streamline Customer Due Diligence Requirements
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