FinCEN wants to know: How to use beneficial ownership info?

(April 9, 2021) Feedback on implementation of new laws requiring certain business entities to submit their beneficial ownership information directly to the federal financial crimes enforcement agency is being sought by Treasury’s Financial Crimes Enforcement Network (FinCEN), the agency said this week.

In an advanced notice of proposed rulemaking (ANPR), the FinCEN said it is looking at several ways in which the submission, and use, of the information would work. Under the Corporate Transparency Act (CTA), enacted as part of last year’s National Defense Authorization Act (NDAA), the beneficial ownership information submitted to FinCEN may be disclosed to financial institutions (including credit unions) in their compliance with BSA/AML customer due diligence (CDD) requirements. “Beneficial owners” are those individual natural persons who ultimately own or control the reporting companies.

The ANPR points out that the disclosures are subject to appropriate protocols to protect confidentiality. However, it seeks comment on what information should be collected and how financial institutions can access the data. For example, it asks what information should be required from a reporting company about the company’s corporate affiliates, parents, and subsidiaries, particularly given that in some cases multiple companies can be layered on top of one another in complex ownership structures? As for financial institutions, it asks how can FinCEN make beneficial ownership information available to financial institutions with CDD obligations so as to make that information most useful to those financial institutions?

Comments are due by May 5.

ANPR: Beneficial Ownership Information Reporting Requirements