The US treasury department’s Financial Crimes Enforcement Network (FinCEN) has published an Advance Notice of Proposed Rulemaking (ANPR) seeking comments on the new Anti-Money Laundering Act of 2020 (AML Act) which includes the Corporate Transparency Act (CTA).

Reforms in the act present significant implications for financial institutions and their compliance programmes.

Beneficial ownership central

Comments are sought on several aspects of the CTA, including reporting requirements, the beneficial ownership registry, and disclosure of beneficial ownership information (BOI) to third parties.

The CTA requires certain companies to report BOI and FinCEN to maintain in a registry that will only be available to authorised parties.

Clarification of definitions

The ANPR seeks comments on definitions within the CTA such as “beneficial owner,” “reporting company,” or “applicant”.

Comments are also sought on BOI reporting such as whether companies should be required to report details of affiliates, subsidiaries and parent companies.

Financial institutions’ rights

FinCEN is asking how it should authenticate parties eligible to access the BOI registry and how information on the registry should be managed to ensure confidentiality.

Comments are also sought on whether financial institutions should be allowed to use the registry for customer identification.

Landmark legislation

The new act establishes the most comprehensive set of reforms to the US’ AML legislative framework since the passage of the Patriot Act in 2001.

The AML Act was passed into law as part of the country’s massive 2021 National Defence Authorisation Act.

FinCEN’s Advance Notice of Proposed Rulemaking can be found here.

Categories: Trade Based Financial crimes News

Tags: AML, Anti-Money Laundering Act, beneficial ownership, BOI, CTA, FinCEN, US treasury