FinCEN Releases Frequently Asked Questions Regarding Customer Due Diligence and Beneficial Ownership Requirements

FinCEN Releases Frequently Asked Questions Regarding Customer Due Diligence and Beneficial Ownership Requirements

Client Alert

Related Solutions

WilmerHale has played a leading role in shaping the rules that govern the US financial services industry.
Backed by deep experience gained across the legal, government and corporate spheres, we guide clients through internal investigations, monitorships, and other crucial AML and economic sanctions matters.
Representing FinTech clients throughout their lifecycles.
WilmerHale’s Investment Management Group provides sophisticated legal and regulatory advice to investment advisers, private fund sponsors, registered funds, and their independent trustees.
Counseling clients on challenging banking and financial services issues and complex consumer financial services rules and regulations.

Last week the Financial Crimes Enforcement Network (FinCEN) issued much-anticipated Frequently Asked Questions (FAQs) that provide additional guidance to financial institutions relating to the implementation of the new Customer Due Diligence Rule (CDD Rule), set to go into effect on May 11, 2018. In general, the FAQs clarify certain issues that have caused implementation challenges for financial institutions. While FinCEN's earlier guidance provided a general overview of the CDD Rule—including the purpose of the rule, the institutions to which it is applicable, and some relevant definitions—the new FAQs provide greater detail for financial institutions seeking to comply with the CDD Rule. The FAQs are meant to assist covered financial institutions in understanding the scope of their customer due diligence (CDD) obligations, as well as the rule's impact on their broader anti-money laundering (AML) compliance. While the guidance is helpful in clarifying some of FinCEN's expectations, the implementation challenge lies in applying the CDD Rule to a financial institution's specific products and services.

As financial institutions work to meet the CDD Rule's fast-approaching May 11 compliance deadline, they should pay special attention to the following key areas summarized below.

Read the full alert.

Authors

Notice

We appreciate your interest in WilmerHale. While we are pleased to have you contact us, please keep in mind that merely contacting WilmerHale does not create an attorney-client relationship. Such a relationship will not arise until the Firm agrees in writing to represent you in connection with a particular matter. Importantly, unless and until this has occurred, you should not provide us with any confidential information, and we have no duty to keep confidential any information that we may receive from you. Thank you for your understanding.

I Accept Cancel