DOEREN MAYHEW
• Account for financial institutions ’ access to BOI reported to FinCEN so they may confirm BOI provided directly to them for the purpose of facilitating their compliance with AML , countering the financing of terrorism and customer due diligence requirements .
• Reduce any burdens on institutions and legal entity members / customers that are , in light of the CTA , unnecessary or duplicative .
Access Rule Requirements
Pursuant to 31 CFR 1010.955 ( b )( 4 ), upon receipt of a request from a financial institution subject to CDD requirements , FinCEN may disclose BOI information to them to facilitate compliance with the CDD requirements , provided the reporting company reporting the information to FinCEN consents to the disclosure . Consequently , the disclosure process includes the following elements :
• The financial institution wants BOI information to assist with CDD requirements .
• The institution obtains and documents the consent of the reporting company .
• The institution requests information from FinCEN .
Understanding CDD
What does the final rule mean by CDD requirements ? 31 CFR 1010.955 ( b )( 4 ) states CDD requirements mean “… any legal requirement or prohibition designed to counter money laundering or the financing of terrorism , or to safeguard the national security of the United States , to comply with which it is reasonably necessary for a financial institution to obtain or verify beneficial ownership information of a legal entity customer .”
Consent
Before requesting BOI from a reporting company , the financial institution must obtain and document the consent of the reporting company . While the reporting company consent must be documented , it need not specifically be in writing . The final rule does not prescribe any particular means by which an institution must obtain a reporting company ’ s consent . Rather , the final rule affords them substantial discretion in the manner in which they obtain consent .
The documentation of the reporting company ’ s consent must be maintained for five years after it is last relied upon in connection with a request for information . Note , FinCEN recognizes it does not have capacity to review and verify consent forms have been obtained . Consequently , financial institutions ’ compliance with these requirements will be assessed by examiners during exams .
The final rule does not require an institution to notify a reporting company each time they retrieve the reporting company ’ s BOI from FinCEN , nor does it require the submission proof of consent to FinCEN , unless otherwise required by law . The final rule only requires the institutions to obtain a reporting company ’ s consent at a time prior to an initial request for the reporting company ’ s BOI from FinCEN , and it may rely on consent to retrieve the same reporting company ’ s BOI on subsequent occasions , including to open additional accounts for that reporting company , unless the consent is revoked .
Additionally , the final rule does not address either revocation or expiration of consent . Rather , it provides flexibility to financial institutions to develop appropriate procedures and mechanisms with respect to the revocation of consent or the expiration of consent . The rule does not articulate specific procedures or mechanisms through which a reporting company can provide or revoke consent ( e . g ., what forms or mechanisms an institution should use , which company representatives may provide or revoke consent , whether affiliates can consent on behalf of one another , when corporate changes would require obtaining new consent or how they should handle customers who refuse to provide consent ).
Certification
When the financial institution requests the BOI information from FinCEN , it must provide a written certification . They must certify it is requesting the information to facilitate its compliance with CDD requirements under applicable law and has obtained and documented the consent of the reporting company to request the information from FinCEN .
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VIEWPOINTS : REGULATORY COMPLIANCE EDITION | 07