If under the ownership prong an entity is owned wholly or partially by another entity how do we complete the BO certification. I know we document the control person. Under beneficial owner's do we put the second LLC and then complete a second BO certification or do we just put all of the individuals that are beneficial owners on the same certification form. Where do we document that an LLC has ownership. Also, we added a percentage column to our certification form.

Remember, the person opening the account on behalf of your legal entity customer is the one that completes the BO certification. The rule states that only individuals can be beneficial owners, so an LLC is not a beneficial owner. The person opening the account on behalf of your legal entity customer needs to tell you if there are any individuals from the second LLC (or third or fourth) that indirectly (or directly) have a 25% ownership in your legal entity customer.

I have heard some bankers say they are going to use multiple certification forms when there are multiple LLCs, but I just can't wrap my head around why that would be a good idea. The rule wants any individual who directly or indirectly owns 25% or more of your legal entity customer. Therefore, IMHO I just don't see the benefit in recording legal entities that own legal entities on the certification form (or multiple forms).

That said, an addendum or flow chart like that which is outlined in FAQ 3 might be helpful for the individual opening the account on behalf of the legal entity customer, but it certainly isn't required for the bank to complete. The FAQs can be found here: https://www.fincen.gov/sites/default/files/2018-04/FinCEN_Guidance_CDD_FAQ_FINAL_508_2.pdf

If you're a member of CBANC, there is an excellent flow chart tool on it that you can fill in the info to come up with the BO when multiple entities are involved, it's pretty neat. If you're not a member, it's free, you just need to register.

I was just hunting for the tool on CBANC but I did not locate it. What's it called? I downloaded several BO flowcharts but none were for multiple entity mapping. Searched on 'most downloaded' and 'most thanked'.

Beneficial Ownership Hierarchy Chart

Got it! Thanks!

Yes, this is a very cool tool; however, I am hesitant to make it available to our employees as I don't really want them to get overly involved in helping the customer figure out who should be on the form.

Are you making the form available?

Our Sr Mgmt has decided that if the entity is owned by an entity they want the front lines to kick it to a commercial banker to do the due diligence. There doesn't seem to be good optimism the normal retail new account openers can do a smooth job with this.

Sounds like your senior management doesn't understand that your bank can rely on the information provided in the form.

However, your frontline people should be able to explain indirect ownership to the customer. Perhaps that is the reason form them wanting the customer referred.

Sounds like the time associated with opening an account will be increasing substantially at your bank.

We'll see how things shake out in real life. It might not be practical to do what they are thinking now.