DOEREN MAYHEW
FinCEN Issues Phase 2 of BOI Rules
On Dec . 21 , 2023 , the Financial Crimes Enforcement Network ( FinCEN ) issued a final rule implementing phase two of the Corporate Transparency Act ( CTA ). The final rule , known as the Access Rule , sets forth the circumstances under which beneficial ownership information ( BOI ) reported to FinCEN may be disclosed to authorized BOI recipients and how the information must be protected .
The Access Rule provides access to BOI for the following six types of recipients :
1 . U . S . Federal agencies engaged in national security , intelligence or law enforcement activity .
2 . U . S . state , local and tribal law enforcement agencies
3 . Foreign law enforcement agencies , judges , prosecutors , central authorities and competent authorities ( foreign requesters ).
4 . Financial institutions using BOI to facilitate compliance with customer due diligence ( CDD ) requirements under applicable law .
5 . Federal functional regulators and other appropriate regulatory agencies acting in a supervisory capacity assessing financial institutions for compliance with CDD requirements under applicable law .
6 . Treasury officers and employees . Doeren Mayhew ’ s compliance specialists highlight the rule ’ s impact specifically on financial institutions and what it means for their compliance program .
Background
Phase two of the implementation follows the implementation of phase one , the BOI reporting rule . This rule was issued on Sept . 30 , 2022 and requires certain corporations , limited liability companies and other similar entities created in , or registered to do business in , the United States to report to FinCEN information about themselves , its beneficial owners , and , in some cases , its company applicants . The rule did not directly impact financial institutions .
Phase three of the CTA , which has not yet been proposed , will revise the current CDD Rule for financial institutions . In particular , the CTA directs FinCEN to revise the current CDD rule to :
• Bring it into conformity with the AML Act of 2020 , including the CTA .
06 | VIEWPOINTS : REGULATORY COMPLIANCE EDITION