US: BEST PRACTICES FOR COMPLYING WITH BENEFICIAL OWNERSHIP REQUIREMENT OF CDD RULE

On 31 December, the American Bankers’ Association Banking Journal published an article which recommends some best practices for financial institutions in the US when collecting beneficial ownership information when onboarding new entities.  These include determining the legal status of the new entity, then deciding who its beneficial owners are – highlighting best practices and red flags.  It points out the relevant rules specifically require the financial institution to establish a “reasonable belief” that it knows the “true identity” of both the legal entity customer and its beneficial owners; and hence every financial institution should establish a clear and specific definition of “reasonable belief” and incorporate this into written policies.

https://bankingjournal.aba.com/2019/12/best-practices-for-complying-with-beneficial-ownership-requirement-of-cdd-rule/

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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