U.S. FinCEN on Beneficial Ownership

U.S. FinCEN on Beneficial Ownership

On 12 June 2019, FinCEN spoke on transparent beneficial ownership.

  • FinCEN director Kenneth A. Blanco spoke at the NYU Law compliance program.
  • Discussed need for corporate transparency, by disclosing beneficial ownership.
  • FinCEN evolving efforts to modernize, and tackle a number of financial crimes.

Beneficial Ownership

  • Various bad actors set up US shell companies to mask, further criminal activity.
  • FinCEN customer due diligence rule, requires collection of beneficial ownership
    information for legal entity when opening account at bank, financial institution.
  • Need collection beneficial ownership information at corporate formation stages.
  • Finding true owner of US shell company requires huge amount time, resources.
  • Takes law enforcement, grand jury subpoenas, surveillance operations, witness
    interviews, search warrants, and sometimes request of foreign legal assistance.
  • FinCEN working with Congress to find way to address serious gap.

Modernize AML System

  • FinCEN taking actions to modernize, joint statement to banks and credit unions
    to take innovative approach, to prevent money laundering and terror financing.
  • FinCEN innovation hours program, events showcase technologies.
  • Catalog, disclose the value of BSA reporting, and revamp BSA advisory group.
  • FinCEN exchange to share info among firms and law enforcement.
  • Established the FinCEN director law enforcement awards program.

Approach to Evolving Threats

  • Best way to deal with threats is to follow the money, expose activity, prevent
    illicit networks from reaping benefit of power of economy or financial system.
  • Practical steps to address virtual currency and cyber-enabled crimes, threats.
  • FinCEN with the IRS, has launched supervisory exam of virtual currency MSBs.
  • Working to combat rise business email compromise fraud (BEC).