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Failure to Collect Beneficial Ownership Info

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Would failure to collect beneficial ownership information at account opening (CDD) or a reason for not needing CDD certification of beneficial ownership be considered a CIP exception?

Not necessarily. The two requirements have obvious similarities, and FinCEN connects them by requiring similar identification verification steps. However, if Corporation A opened a checking account under full CIP procedures two years ago, it would not be a violation to skip the CIP process when it opens another checking account this week, since CIP is a customer-related requirement. But the beneficial ownership certification under CDD is required for each new account (account-related) despite the fact it gathers customer-related information. Omitting the CDD certification of beneficial ownership would be a violation, but it would not violate CIP rules.

First published on 09/08/2019

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