FinCEN Sets Beneficial Ownership Info Access Rule

FinCEN has determined entities which will be permitted access to the new centralized register of beneficial ownership being established under the Corporate Transparency Act.   

FinCEN will permit certain Federal, State, local, and Tribal officials, as well as foreign officials acting through a Federal agency, to obtain BOI for use in furtherance of statutorily authorized activities such as those related to national security, intelligence, and law enforcement.

Financial institutions with customer due diligence requirements under applicable law will have access to BOI to facilitate compliance with those requirements, as will the Federal functional regulators or other appropriate regulatory agencies that supervise or assess those financial institutions' compliance with such requirements.

This final rule implements the beneficial ownership information (BOI) access and safeguard provisions in the Corporate Transparency Act (CTA).^[1] The rule balances the statutory requirement to create a database of BOI that is highly useful to authorized BOI recipients, with the requirement to safeguard BOI from unauthorized use.

This final rule reflects FinCEN's understanding of the critical need for the highest standard of security and confidentiality protocols to maintain confidence in the U.S. Government's ability to protect sensitive information while achieving the objective of the CTA noted above—establishing a database of BOI that will be highly useful in combatting illicit finance and the abuse of shell and front companies by criminals, corrupt officials, and other bad actors.

Specifically, this final rule implements the provisions in the CTA, codified at 31 U.S.C. 5336(c), that authorize certain recipients to receive disclosures of identifying information associated with reporting companies, their beneficial owners, and their company applicants (together, BOI). The CTA requires reporting companies to report BOI to FinCEN pursuant to 31 U.S.C. 5336(b). This rule reflects FinCEN's careful consideration of public comments, including those received in response to (1) an advance notice of proposed rulemaking (ANPRM) ^[2] on the implementation of the CTA, (2) an NPRM regarding BOI reporting requirements (Reporting NPRM),^[3] and (3) an NPRM regarding BOI access and safeguards (Access NPRM).^[4]

U.S. law enforcement officials and the Financial Action Task Force (FATF),among others, have for years noted how the lack of timely access to accurate and adequate BOI by law enforcement and other authorized. recipients remained a significant gap in the United States' anti-money laundering/countering the financing of terrorism (AML/CFT) and countering the financing of proliferation (CFP) framework.