PRACTICAL SOLUTIONS
“…the Associations believe that the definition of “beneficial ownership interest” is
overly broad. A possible approach could be
that the final rule would not seek to define
“beneficial ownership interest” with general
terminology, but rather allow covered
financial institutions to determine which
persons, in particular circumstances,
should be viewed as having the requisite
beneficial ownership. The requisite beneficial ownership could be determined by
reference to that level of ownership that,
as a practical matter, equates with control
over or entitlement to the account…” (Joint
Letter from: ABA Securities Association
American Bankers Association Bankers
Association for Finance and Trade Financial
Services Roundtable Futures Industry Association — July 1, 2001).
The arguments were persuasive and the definition was narrowed. The Register goes on
to explain, “The Rule also should provide
covered financial institutions with a workable standard for assessing beneficial
ownership for private banking accounts,
thereby allowing covered financial institutions to focus their due diligence efforts in
a risk-based fashion on those accounts and
individuals posing a heightened risk of
money laundering.” (Federal Register/Vol.
71, No. 2/Wednesday, January 4, 2006, Rules
and Regulations. P 505).
In the end, the thing to remember is to focus
your due diligence efforts in a risk-based
fashion on those accounts and individuals
posing a heightened risk of money laundering. Thank you Federal Register!
To be clear, the Federal Register is not the
only place for guidance. The FFIEC manual
also provides a tremendous amount of
information. Remember, however, that the
writers of the FFIEC Manual review and are
persuaded by the contents of the Register.
The “source of funds” discussion above is a
good example. The FFIEC guidance is very
similar to what is written in the Register. See
FFIEC Manual 2010, page 132.
So when nothing else matters but a clear
understanding of the BSA go to http://www.
regulations.gov or http://www.fincen.gov.
Both are easily navigable sites that provide
access to the BSA and the Regulations.
Michael Kneis, CAMS, HIFCA, El Dorado
Task Force/ HIDTA, New York, NY, USA,
[email protected]
ACAMS.ORG | MARCH–MAY 2011 | ACAMS TODAY
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