FinCEN Issues Final Rule on Beneficial Ownership Information Access and Safeguards

Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Treasury Department has issued a final rule outlining a structure for both access and protection of the Beneficial Ownership Information (BOI), as per a press release by the agency. FinCEN took this step in alignment with the US government’s initiative to combat illicit finance and enhance corporate transparency.

Following the bipartisan Corporate Transparency Act (CTA), the final rule governs permitting the disclosure of BOI in line with FinCEN’s final BOI Reporting Rule dated September 30, 2022.

FinCEN has also released interagency statements, guiding banks and non-bank financial institutions on how the final rule aligns with FinCEN’s existing Customer Due Diligence Rule.

Who will Have Access to BOI?

As per the Corporate Transparency Act, the Final Access rule grants access to BOI to the following entities

• Federal agencies engaged in national security, intelligence, or law enforcement activity
• State, local, and Tribal law enforcement agencies with court authorization
• Foreign law enforcement agencies, judges, prosecutors, and other authorities meeting the required criteria
• Financial institutions with customer due diligence requirements
• Federal functional regulators and other appropriate regulatory agencies.
• U.S. Department of the Treasury officers and employees

While talking about the final rule, Andrea Gacki, Director FinCEN said, “BOI can provide essential information to law enforcement, intelligence, and national security professionals as they work to protect the United States from bad actors who exploit anonymous shell companies to engage in money laundering, corruption, sanctions and tax evasion, drug trafficking, fraud, and a host of other criminal offenses with impunity, while legitimate businesses suffer from their misdeeds.”
The Access rule is the second step in a series of three planned to enforce CTA. Following this, FinCEN will initiate a third rulemaking to modify FinCEN’s customer due diligence rule, by CTA requirements. The rule governing BOI access will come into force on February 20, 2024. Commencing in 2024, FinCEN will gradually grant access to BOI to government agencies and financial institutions, following the requirements of the final rule.

Also read:New US Rule Proposed by FinCEN Reaches White House for Regulatory Review