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In Response To:
Thread Starter: Anonymous
Title: Re: Verification of identity of Beneficial Owners

Op here. So far we've had Best Practices-type answers. Thank you. But am very interested if anyone knows the answer to the below, because "Best Practices" are what the examiner is using to examine us, and I don't think that's a valid exam standard. It's basically, "Well, the last bank I visited did X, so you better start doing X too." Very slippery slope that can lead to endless "improvements" that are no longer in line with the intent of the BO law. I appreciate the input sincerely, but, for anyone else reading this:

1. If the beneficial owner is an existing customer (has a personal account), do the BO rules specifically require us to re-verify their driver's license or passport information at the time of the new business account opening? Wouldn't a simple notation of "Existing customer" be valid, for a record of how we verified the BO's identity? It's valid for CIP, and BO processes should be based on CIP. (Some examiners might say the "Best Practice" is to get updated ID info for CIP too, but I say that's nonsense. CIP is "once-and-done," not "every time we see you, in perpetuity.")

2. For a not-present B.O., what other methods do you allow at your institution, of verifying that not-present, non-customer BO's identity, other than seeing a government-issued photo ID, if any? Are you using credit reports? Financial statements? Merely "contacting" the individual?

(For those who said, "Get ID, no exceptions," are you saying your staff would deny the account request, when there are 4 BOs and only 3 have sent over an ID? And/or delay the account opening until that 4th BO's ID is received? Seems a) extreme and b) unlikely to really be happening at the branch level, depending on the volume of accounts you open.)

Also just want to point out that checking OFAC is only required for BOs who own 50% or more. If a BO owns less than that then there is no OFAC action you could take, even if you found a 100% exact match. (See https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1521#:~:text=OFAC%27s%2050%20Percent%20Rule%20states,blocked%20persons%20are%20considered%20blocked.)