Financial institutions face a pending deadline to meet new customer due diligence requirements. FinCEN has issued updated Frequently Asked Questions to assist financial institutions in understanding the scope of the requirements that become effective May 11, 2018. The FAQs provide guidance to institutions covered by the Customer Due Diligence Requirements for Financial Institutions (“CDD Rule”). The CDD Rule requires covered financial institutions to establish procedures to verify the identity of beneficial owners of certain legal entities and additional risk based procedures for ongoing compliance with anti-money laundering programs.
The FAQs cover topics, among others:
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beneficial ownership thresholds including those applicable to legal entities with complex ownership structures
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collection and verification of information
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multiple accounts
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renewals and updating information
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pooled investment vehicles
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trusts and trustees
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definitions and exclusions of certain legal entity customers
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private label retail accounts
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equipment finance and leasing
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currency transaction reports
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customer relationships and risk profiles
You can read the current FAQs. The CDD Rule was first published on May 11, 2016, as amended September 29, 2017, pursuant to which FinCEN, on July 19, 2016, previously issued FAQs.
