Nikhil Gore’s commentary was included in an American Banker article covering a new rule by the Financial Crimes Enforcement Network (Fincen) detailing how law enforcement, financial institutions and regulators will be able to access a comprehensive list of who owns which corporate entities in the U.S. The new rule is aimed at combating money laundering by revealing who owns shell companies and other opaque groups.
“While Fincen continues to indicate its database system should be able to begin accepting beneficial ownership reports by the first day of 2024, mounting political pressure to delay its launch introduces some uncertainty as to when firms will bear the brunt of the new rules.” He also noted that access to the beneficial ownership information database in 2024 will be initially limited to certain federal government entities as part of a pilot program, meaning banks will need to wait and see how their customer due diligence requirements are ultimately altered long term.
Nikhil added that “financial institutions would not have access until around the time that new customer due diligence requirements — which have yet to be proposed — come into effect. Fincen has not provided any specific timeline for when it might release a customer due diligence proposal, although we expect it sometime in 2024 [so] overall, there is still a lot of uncertainty about when and how all of these rulemakings will impact financial institutions’ compliance obligations and practices.”
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