Introductory BSA/AML Examiner School, Atlanta, CA

Key Elements of New CDD Rule

CDD consists of a minimum of four elements: • Identifying & Verifying the Identity of Customers

• Identifying & Verifying Identify of Beneficial Owners of Legal Entity Customers

• Understanding Nature & Purpose of Customer Relationship

• Conducting Ongoing Monitoring to Maintain & Update Customer Information & to Identify & Report Suspicious Transactions

Beneficial Owners

• Each individual who owns 25 percent or more of the equity interests in a legal entity customer and one individual who exercises significant managerial control over the legal entity customer. • Legal entity customers include corporations, limited liability companies, and partnerships or other similar business entities, but not trusts. • Required to go all the way up the chain to a natural person. • No requirement to pierce underlying customers in intermediated accounts. • Standard beneficial ownership certification form option. • Verification of identity, not beneficial owner status. • Preserving a risk-based approach – the rule as a floor not a ceiling.