Last Thursday, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule that establishes the framework for access to and protection of beneficial ownership information (BOI).

The final rule outlines the circumstances under which BOI reported in compliance with FinCEN’s September 2022 final BOI Reporting Rule may be disclosed to federal agencies; state, local, tribal, and foreign governments; and financial institutions, and how it must be protected.

FinCEN also issued two interagency statements to give banks and non-bank financial institutions guidance on the interplay between the final rule and FinCEN’s existing Customer Due Diligence Rule.

“This final rule is a significant step forward in our efforts to protect our financial system and curb illicit activities,” said FinCEN Director Andrea Gacki. “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.”

Reporting and access

In March, a bipartisan group of US senators urged FinCEN to give banks broader access to an incoming registry that identifies the individual owners of legal entities to assist these banks with their AML and sanctions screening and monitoring.

“This final rule is a significant step forward in our efforts to protect our financial system and curb illicit activities.”

FinCEN Director Andrea Gacki

The BOI Reporting Rule was implemented under the Corporate Transparency Act (CTA) in an effort to stop criminals and terrorists from using anonymous shell companies to hide their dirty money.

FinCEN’s next scheduled rulemaking will be to revise FinCEN’s customer due diligence rule, consistent with the requirements of the CTA. The BOI reporting obligations and these new access rules do not make any changes to FinCEN’s customer due diligence rule.

Access to the BOI database will begin a phased roll out in February.