Beneficial Ownership and Verification of Identity

Issue/Inquiry

Under the new beneficial ownership rule, is the Bank required to obtain the TIN of the beneficial owner?

Response Summary

The Bank will be required to obtain the same verifying information for the beneficial owner as for an individual customer, including an identification number.

Response Detail

Under the new beneficial ownership rule, a financial institution will be required to verify the identity of each beneficial owner identified to it, according to risk-based CIP procedures.

When the final rule was published, FinCEN acknowledged that it would be impracticable for an institution to implement the verification requirement with procedures that were identical to its existing CIP procedures for individual customers. Accordingly, the final rule requires that these procedures contain the elements for verifying the identity of individual customers under the CIP rule, but they do not have to be identical. 81 Federal Register 29397 (May 11, 2016), 29407.

The procedures of a financial institution for verifying the identity of the beneficial owner must, at a minimum, require the following information to be obtained:

• Name
• Date of birth
• Address (e.g., residential or business street address)
• Identification number. 12 CFR §§1010.230(b)(2);1020.220(a)(2)(i).

For a U.S. person, the identification number will be the taxpayer identification number (“TIN”). For a non-U.S. person, it will be one or more of the following:

• TIN
• Passport number and country of issuance
• Alien identification card number
• Number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard. 12 CFR §1020.220(a)(2)(i)(A)(4).

The financial institution may rely on the information supplied by the legal entity customer regarding the identity of its beneficial owner or owners, provided that it has no knowledge of facts that would reasonably call into question the reliability of such information. In the case of documentary verification, it may use photocopies or other reproductions of documents such as driver’s licenses or passports. 12 CFR §1010.230(b)(2).

This entry was posted on Monday, November 27th, 2017 at 6:00 am.