FinCEN Issues FAQs Regarding Customer Due Diligence Requirements for Financial Institutions
On April 3, 2018, FinCEN issued FAQs regarding customer due diligence requirements for financial institutions. FinCEN stated that the FAQs were issued to help covered financial institutions understand the scope of the Customer Due Diligence Requirements for Financial Institutions, which were published on May 11, 2016, and amended on September 29, 2017. These FAQs are in addition to FAQs published by FinCEN on this topic in July of 2016.
The FAQs include, but are not limited to, answers to the following questions: (1) can a covered financial institution adopt and implement more stringent written internal policies and procedures for the collection of beneficial ownership information than the obligations prescribed by the Beneficial Ownership Requirements for Legal Entity Customers (31 CFR § 1010.230); (2) are there circumstances where covered financial institutions should consider collecting beneficial ownership information at a lower equity interest threshold under the anti-money laundering program rules with regard to certain customers; (3) what address should be obtained for a legal entity customer’s beneficial owner(s) to comply with the certification requirements- residential or business; and (4) are financial institutions required to have their legal entity customers certify the beneficial owners for existing customers during the course of a financial product renewal (e.g., a loan renewal or certificate or deposit)?
The introduction to the FAQs clarifies that a covered financial institution with notice of or a reasonable suspicion that a customer is evading or attempting to evade beneficial ownership or other customer due diligence requirements should consider whether it should not open an account, close an account, or file a suspicious activity report, regardless of any of the answers to the FAQs.
More information regarding the original FAQs can be found here, and more information regarding the new set of FAQs can be found here.
