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Beneficial Ownership & Cash Management

Home Forums Bank Secrecy Act/Anti-Money Laundering Compliance/ BSA/AML Beneficial Ownership & Cash Management

This topic contains 1 reply, has 2 voices, and was last updated by  rcooper 4 months, 1 week ago.

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  • #13390

    KRT
    Participant

    If an existing legal entity customer with an account that has already been opened signs an agreement for cash management services or remote deposit capture, does that trigger the requirement for certification of beneficial ownership? The “account” definition refers to cash management as being included in “account.”

    #13395

    rcooper
    Keymaster

    31 CFR 1010.230(b):
    With respect to legal entity customers, the covered financial institution’s customer due diligence procedures shall enable the institution to identify the beneficial
    owner(s) of each legal entity customer at the time a new account is opened, unless the
    customer is otherwise excluded pursuant to paragraph…

    31 CFR 1010.230(g): New account means each account opened at a covered financial institution by a legal entity customer on or after the applicability date.

    31 CFR 1020.100:
    Account means a formal banking relationship established to provide or engage in services, dealings, or other financial transactions including a deposit account, a transaction or asset account, a credit account, or other extension of credit. Account also includes a relationship established to provide a safety deposit box or other safekeeping services, or cash management, custodian, and trust services.

    I do not believe what you described would meet the definition of a new account. My interpretation of the second sentence in the definition of account is that the relationship would be newly established to facilitate the cash management function. In your case, the account has already been established. With that being said, this is an area that has been debated. If you’re still questioning your procedure, you may choose to take the more conservative approach and obtain the certification at the time the customer obtains the CM service/signs the agreement or you might consider talking to you examiner or FinCEN about this issue.

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