The Discreet Science
Treasury Considering New Rules on Ultimate Beneficial Ownership
The Wall Street Journal reports on the Treasury Department’s proposed rules changes that would require financial institutions to gather more information on ultimate beneficial ownership of accounts.
“This possibility will certainly cause frustration in some sectors of the financial system,” said Chip Poncy, director of the Treasury’s terrorist financing and financial crimes office, in an interview. Mr. Poncy said his agency wants to “strengthen expectations and requirements for institutions to understand their customer in a way that is eminently workable.” […]
Under current practice, a bank uses business licenses, other corporate documents or a reference from another financial institution to confirm a business exists. Banks also confirm the existence of individuals with access to an account.
Under the Treasury proposal, financial firms could be required to dig deeper into corporate structures and determine the identity of the largest shareholders or top managers. The process becomes complex for corporate, trust and partnership accounts, in part because there is no central database to cross-check information submitted by firms.
“You don’t want to deputize bankers as junior G-men,” said Rob Rowe, vice president and senior counsel at the American Bankers Association. “We’re not good at it.”
