FinCEN CDD FAQ: Why is FinCEN issuing the CDD Rule?

Compliance > BSA > FinCEN CDD/BO Rule - eff 2016
Q:  Why is FinCEN issuing the CDD Rule?
 
A.  FinCEN is issuing the CDD Rule to amend existing BSA regulations in order to clarify and strengthen customer due diligence requirements for certain financial institutions.  The CDD Rule outlines explicit customer due diligence requirements and imposes a new requirement for these financial institutions to identify and verify the identity of beneficial owners of legal entity customers, subject to certain exclusions and exemptions.  Within this construct, as stated in the preamble to the Rule, FinCEN intends that the legal entity customer identify its ultimate beneficial owner or owners and not “nominees” or “straw men.”
 
 
 
This FAQ, and others, was released in July 2016.  The 2016 FAQs were issued to assist institutions in understanding the scope of the Customer Due Diligence (CDD) requirements that were published in May 2016.   They may be found here:  https://www.fincen.gov/statutes_regs/guidance/pdf/FAQs_for_CDD_Final_Rule_(7_15_16).pdf
 

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