Beneficial Ownership of Legal Persons (Nominee Relationships) Regulations 2017

04 Oct Beneficial Ownership of Legal Persons (Nominee Relationships) Regulations 2017

The CTA provides that it is illegal for any person to intentionally provide or attempt to provide FinCEN with a false or fraudulent BOI, or not to intentionally report complete or updated CIRs to FinCEN. The proposed Regulations describe the persons subject to this provision and the acts (or omissions) that trigger a violation. 171. It should be noted that the CSD rule also promotes transparency in the ownership structures of legal persons, thereby strengthening the US economy and national security. However, the TCC reporting requirement can increase these benefits by requiring that the TCC be collected earlier in a company`s life cycle at the time of business creation, rather than when the business opens a bank account. The CTA would also apply to a wider range of companies, as the CSD rule only applies to institutions that are subject to customer due diligence measures of financial institutions (for example, those that have accounts with those institutions). The other component of the definition of beneficial ownership concerns persons who own or control 25% of the holdings of a reporting company. The CTA defines a beneficial owner as “a person who. owns or controls at least 25 % of the company`s holdings. [110] Proposed 31. Paragraph 1010.380(d)(3)(i) of the CFR provides that, for the purposes of this Rule, “interests” would include both the equity of the reporting entity and other types of interests such as equity or profit investments (including partnership shares) or convertible instruments, warrants or rights or other options or privileges to acquire equity, capital or other interests in a reporting entity.

Debt securities are included if they allow their holder to exercise the same rights as one of the declared shares or other shares, including the possibility of converting the instrument into one of the declared shares or other shares. This is similar to the United States. The Securities and Exchange Commission`s definition of “stock guarantee” in 17 CFR 230,405. [111] FinCEN proposes to adopt this understanding to ensure that the underlying reality of ownership, rather than the form it takes, determines the identification of beneficial owners. The approach also prevents the use of complex ownership structures and ownership vehicles that are not direct equity to conceal the beneficial owners of a reporting corporation. 4. A person shall provide or attempt to provide FinCEN with beneficial ownership information when it does so, directly or indirectly, including by providing such information to another person for the purposes of a report or application in accordance with this Section. In addition, CTA authorises FinCEN to require reporting procedures and standards to identify beneficial owners and applicants “by”, among other things, a “unique identification number from an acceptable identification document”. [95] The CTA does not specify how a person must be identified “by” such a number “from” such a document. However, the CTA also makes it illegal to “intentionally provide or attempt to do so. a false or fraudulent photo or identification document.

to FinCEN”, which indicates the hypothesis that photos or identification documents would be reported. [96] It is therefore apparent from this provision that Start Printed Page 69931 indicates that FinCEN is authorized to collect a scanned copy of an identity document and the document number in order to prescribe reporting procedures and standards. Therefore, the proposed rule provides that, as part of the declaration of this unique number, the reporting entity must provide a scanned copy of the identification document from which the unique identification number of the beneficial owner or applicant of the company originates. (ii) A natural person may, directly or indirectly, hold or control an interest in a reporting entity in a variety of ways, including but not limited to: 228.   See U.S. Census Bureau, Table 1. Government Units by State: Census Years 1942 to 2017, available at www.census.gov/data/tables/2017/econ/gus/2017-governments.html. The MORE CONTACT INFORMATION section contains the name and phone number of someone from your agency who can answer questions about the document. It can list two or more people who can be contacted regarding different aspects of a document. FinCEN and other government agencies may also incur costs to enforce the regulation. At this time, FinCEN does not start on print page 69949 estimates of these costs, and they are not included in the above estimates. FinCEN plans to identify non-compliance with boI reporting obligations [164] using various internal and external data sources.

Since external data sources may include third parties, FinCEN seeks feedback on external data sources that would be appropriate for FinCEN to determine non-compliance with BOI reporting obligations and on the potential costs that such third parties, in particular state, local and tribal authorities and financial institutions, may incur. If external data sources contain third-party business data, FinCEN believes that the costs associated with accessing these databases would be modest and incremental, since FinCEN has regular access to these databases, but may need to apply for additional licenses for employees. Once the non-compliance has been identified, FinCEN may initiate contact with the Company, work with law enforcement to investigate the non-compliance, or take enforcement action. FinCEN`s application of the BOI`s reporting obligations would also involve coordination with law enforcement. These law enforcement agencies may also incur costs (time and resources) when conducting non-compliance investigations. FinCEN assumes that the costs to law enforcement agencies that have access to BOI data would be assessed in the BOI Access Regulation and therefore does not estimate them here. FinCEN acknowledges the views of the many commentators who have encouraged FinCEN to require a reporting company to report a significant amount of additional information about itself and the intermediary legal owners through whom the largest natural beneficial owners of the reporting company own their interests.