Title

FinCEN’s Final Rule to Enhance Customer Due Diligence Requirements for Financial Institutions
Client Memorandum

Created date

5/31/2016

On May 11, 2016, the Financial Crimes Enforcement Network ("FinCEN") issued a Final Rule amending the Bank Secrecy Act  that clarifies and enhances customer due diligence (“CDD”) requirements for financial institutions and adds a new requirement for covered financial institutions to identify, and verify the identity of, the beneficial owners of certain of their legal entity customers (the “CDD Rule” or “Final Rule”).  The Final Rule, which reaffirms the four core elements, or “pillars,” of an anti-money laundering program, also adds a fifth pillar: a requirement that covered financial institutions implement and maintain risk-based procedures for conducting ongoing CDD. The CDD Rule becomes effective on July 11, 2016, and covered financial institutions must comply by May 11, 2018.

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