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  • Tag Archive: Beneficial ownership

    1. US: Washington Finalises Beneficial Ownership Database Access

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      US Beneficial Ownership Access – Introduction

      In a key development for corporate transparency, the Financial Crimes Enforcement Network (FinCEN) of the US government has initiated the process of receiving beneficial ownership information reports as mandated by the Corporate Transparency Act 2021.

      This strategic move aims to fortify the battle against financial crimes by ensuring clarity in company ownership structures.

      Submission Requirements and Deadlines

      Under the new framework, existing companies are provided with a one-year window to submit their reports, while newly established entities must adhere to a 90-day filing deadline post-creation or registration with FinCEN.

      The agency is entrusted with the administration and secure management of the beneficial ownership database.

      Reporting entities are required to furnish comprehensive details for each beneficial owner, including their name, date of birth, address, and a valid identification number from an approved list of documents such as a US driving license, passport, or other state or local government-issued documents, including foreign passports.

      FinCEN’s Final Rule and Access Rights

      As 2023 drew to a close, FinCEN unveiled a final rule elucidating the conditions and authorized entities eligible to access the national beneficial ownership database.

      This rule, largely based on the previous year’s draft but incorporating notable amendments, is set to progressively allow access from 20 February onwards.

      The list of entities with granted access includes federal, state, and foreign law enforcement agencies, financial institutions, regulators involved in customer due diligence processes, and the US Treasury.

      Expansion of ‘Customer Due Diligence Requirements’

      A significant enhancement in the final rule is the broadening of the ‘customer due diligence requirements’ clause.

      This expansion now covers legal obligations designed to counteract money laundering, terrorism financing, or protect the US’s national security.

      Consequently, financial institutions are empowered to integrate FinCEN’s beneficial information into their due diligence and suspicious activity monitoring and reporting mechanisms, thereby reinforcing their compliance with the Banking Secrecy Act or sanctions enforced by the US Treasury’s Office of Foreign Assets Control.

      Phased Implementation and Pilot Program

      The implementation of access to the beneficial ownership information will commence on 20 February with a pilot program aimed at key federal agency users.

      This initial phase will be followed by extending access to other federal agencies, and subsequently to state and local law enforcement agencies.

      The final rule also paves the way for financial institutions to share beneficial ownership information with employees or contract personnel outside the USA, with specific exceptions, thus addressing operational challenges for institutions with extensive international operations and compliance functions.

      Database Operation and Data Access

      While the precise operational framework of the database remains under wraps, FinCEN has clarified its stance against providing bulk data exports to authorized users.

      Instead, an application programming interface is expected to be made available, allowing these users to conduct specific queries in the database.

      US Beneficial Ownership Access – Conclusion

      This landmark regulation marks a significant stride in the US government’s ongoing efforts to enhance corporate transparency and combat financial crimes effectively.

      If you have any queries about this article on US Beneficial Ownership Access, or any other US matters, then please get in touch.