It’s no secret that the “bad guys” are usually a step ahead of regulatory compliance. They are always looking for new ways to evade the law and it often takes a while for regulatory compliance to catch up. Back in the day we had “Know Your Customer” and then after September 11, 2001, the Customer Information Program (CIP) requirements came into play. Both assisted financial institutions in knowing who they were doing business with. This was more difficult on the commercial side; however, because the “who” could be more easily disguised by using shell companies and complex business structures. Thus came the need to increase Customer Due Diligence requirements and rules for identifying beneficial owners.
Kevin explains more in the video.
Video Highlights:
- Financial institutions must verify beneficial owners of legal entity customers as part of their customer due diligence program.
- Identification of beneficial owners can help prevent money laundering schemes using shell companies.
- Financial institutions are required to update beneficial owner information during their relationship with an entity.
Published
2023/12/14
