Obviously, OFAC must be performed on the beneficial owners. Are banks conducting OFAC on those layers you must drill down on?

Example:
Entity A (who is opening the account) - owned by two entities (Entity B and Entity C each owning 50% each) - Entity B is owned by Jill Smith (100%) and Entity C is owned by Sue Smith (100%).

If OFAC being performed on Entity B and Entity C, as well? Are you listing Entity B and Entity C on the Certification Form?

We're not drilling down past the first layer of ownership. I don't believe that's requirement.

We will only be performing an OFAC search on the individuals who own 25% or more of the legal entity opening the account. So in your example, we will not be keeping information on Entity B and Entity C. Jill Smith and Sue Smith would be listed on the certification form.

You may want to rethink that approach:

Question 18: Collection of beneficial ownership information
Q: Must covered financial institutions collect beneficial ownership information on all of the beneficial owners of a legal entity customer?
A: Covered financial institutions must collect and verify the beneficial ownership information of each person who meets the definition under the ownership prong, and of one person under the control prong. Under the ownership prong, covered financial institutions are required to collect the beneficial ownership information only for each individual who owns directly or indirectly 25% or more of the equity interest of a legal entity and under the control prong, for one individual with significant responsibility to control, manage, or direct the entity. However, the rule recognizes that there may be instances when no one individual owns 25% or more of the equity interest of the legal entity; in such instances, the financial institution is still required to collect the required information for one individual who controls, manages, or directs the legal entity customer.

I was in the middle of repyling to this yesterday when the site became unavailble to me!

Anyway bcompliance, I worded that poorly. We will obtain BO information for anyone who has been certified by the individual opening the account to own 25% or more. However, we won't be doing any digging through multiple layers, it'll be on the individual to inform us.

We will be performing OFAC on the legal entity; any beneficial owner with 25% or greater equity interest; and the control person. Beneficial owner(s)/control person will be entered in our core system so that they can be scanned.

In other words, anyone that appears on the certification form will be subject to OFAC scanning.

we are doing what TryingtoComply stated.

Ditto with Trying to Comply - we also will ask questions to try determine indirect bene owners greater than 25%, if it is a complex relationship with many entities.