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Welcome to the ACAMS Web Seminar

Notice of Proposed Rulemaking: Game-Changing Rules on Beneficial Ownership?

August 22nd, 201412:00 Noon– 1:00 pm ET

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ModeratorJohn J. Byrne, Esq., CAMS

Executive Vice President

ACAMS

Speakers

Kieran Beer, CAMSEditor-in-Chief

ACAMS moneylaundering.com

Chip PoncyCo-Founder

Financial Integrity Network

Dan Soto, CAMSChief Compliance Officer

Ally Financial

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Today’s Agenda

• Background on the need for additional due diligence

• FATF on Beneficial Ownership

• Advanced Notice of Proposed Rulemaking Comments

• NPRM Key Issues to consider

• Practical Issues

• Your Questions

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Background• Concern on risks with shell companies and trusts identified in 2007

National Money Laundering Strategy• United Nations states that abuse of illegal entities is an international

problem as far back as 1998• GAO report focused on vulnerabilities with company formation in the

United States• Treasury’s 3-prong approach to beneficial ownership - Attempts to address

beneficial ownership challenges through legislation were never passed• Law enforcement has repeatedly reported that major drug trafficking

organizations use shell companies to launder drug proceeds• Increased global focus on financial transparency through G7/G8, G20, and

FATF Framework • Reliance of FATCA and corresponding foreign approaches to tax reporting

on beneficial ownership collected through CDD

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Financial Action Task Force (FATF)

United States was primarily criticized for

• lack of sufficient CDD regulatory requirements, particularly for capturing information on beneficial ownership, and

• lack of requirements to collect beneficial ownership information under company formation laws

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Previous Actions on CDD and Beneficial Ownership:

• 2010 Interagency Guidance—compilation of regulations, rulings and guidance covering CIP, private banking and correspondent banking

• ANPR issued in March 2012

• FinCEN held roundtables for private sector to weigh in on definitions, current practices, verification and challenges associated with certain products, services and relationships

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FinCEN NPRM on CDD

• 60 Day Comment Period

• File on www.regulations.gov or by regular mail

• All comments are part of the public record

• FinCEN restates that CDD is fundamental to an effective AML program

• Read the Proposal!

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The CDD NPRM

FinCEN believes that the key elements of CDD include:

• Identifying and verifying the identity of customers;

• Identifying and verifying the identity of beneficial owners of legal entity customers;

• Understanding the nature and purpose of customer relationships; and

• Conducting ongoing monitoring to maintain and update customer information and to identify and report suspicious transactions.

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CDD Proposal-Key Elements:• New requirement for “covered” institutions to

collect beneficial ownership in a standardized format; and

• Identify and verify any individual who owns 25% or more of a legal entity and individual who controls the legal entity.

• Relevance of specific consideration of non-exempt pooled investment vehicles

• Other Sections

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Resources http://www.fincen.gov/statutes_regs/guidance/html/fin-

2010-g001.html

http://www.treasury.gov/press-center/press-releases/Pages/jl2595.aspx

http://www.fatf-gafi.org/topics/fatfrecommendations/documents/internationalstandardsoncombatingmoneylaunderingandthefinancingofterrorismproliferation-thefatfrecommendations.html

http://www.moneylaundering.com/Pages/Home.aspx

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If you have additional questions for today’s experts,or

suggestions for future web seminars,

please send those to:

[email protected]

Thank you for joining us today!

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For more coverage on FinCEN’s Notice of Proposed Rulemaking and other breaking financial crime news, subscribe to acamsmoneylaundering.com

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