FinCEN Issues FAQs Regarding CDD Requirements for Financial Institutions

April 4, 2018 at 1:52 pm

Written by: Lauren Haahr

On April 3, FinCEN issued Frequently Asked Questions (“FAQs”) to assist covered financial institutions in understanding the scope of the “Customer Due Diligence (“CDD”) Requirements for Financial Institutions”, which were originally published on May 11, 2016 and amended on September 29, 2017.  The majority of the FAQs provide additional guidance regarding a financial institution’s obligations to collect, identify and verify information regarding the beneficial ownership of a legal entity customer.  For example, one FAQ addresses the means of identity verification that are sufficient to reliably confirm beneficial ownership under the CDD rule.  The FAQs also clarify that certain types of entities, such as sole proprietorships (individual or spousal), unincorporated associations, charities or non-profits, are not considered legal entity customers under the CDD Rules.  The full-text of the FAQs is available here.

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