On 4/18/24, FinCEN updated its FAQ Section and added a new section titled “Access to BOI Information”. This new section addresses the phased approach from FinCEN to providing access to BOI – beneficial ownership information – as FinCEN is not currently accepting requests for access to BOI. FinCEN states that it will provide further guidance on how to request access in the future. The five phases to providing access to BOI are:
- Phase 1: expected to begin in the spring of 2024, will be a pilot program for a handful of Federal agency users.
- Phase 2: expected in the summer of 2024, will extend access to Treasury offices and other Federal agencies engaged in law enforcement and national security activities that already have memoranda of understanding for access to Bank Secrecy Act information.
- Phase 3: expected in the fall of 2024, will extend access to additional Federal agencies engaged in law enforcement, national security, and intelligence activities, as well as to State, local, and Tribal law enforcement partners.
- Phase 4: expected in the winter of 2024, will extend access to intermediary Federal agencies in connection with foreign government requests.
- Phase 5: expected in the spring of 2025, will extend access to financial institutions subject to customer due diligence requirements under applicable law and their supervisors.
Other extracts from the new Access to BOI section are:
- FinCEN is authorized to disclose beneficial ownership information to Federal agencies engaged in national security, intelligence, or law enforcement activities as well as Federal regulatory agencies that supervise financial institutions for compliance with customer due diligence requirements. To request beneficial ownership information from FinCEN, such Federal agencies will first need to enter into a memorandum of understanding with FinCEN describing how the agency will protect the security and confidentiality of the information. Additional information about entering into such a memorandum will be available when an agency becomes eligible to obtain access to beneficial ownership information under the phased implementation timeline.
- Agencies interested in access to beneficial ownership information are encouraged by FinCEN to review the Beneficial Ownership Information Access and Safeguards Rule and become familiar with this rule’s requirements for agencies accessing beneficial ownership information.
- State, local, and Tribal law enforcement agencies will be able to request beneficial ownership information from FinCEN in certain circumstances. A State, local, or Tribal law enforcement agency, however, can only request beneficial ownership information from FinCEN if authorized by a “court of competent jurisdiction” to seek the information in a criminal or civil investigation. The state, local, or Tribal law enforcement agency also must meet certain other access requirements, including entering into a memorandum of understanding with FinCEN that describes how the agency will protect the security and confidentiality of the information.
- State regulatory agencies that supervise financial institutions for compliance with customer due diligence requirements may also request beneficial ownership information from FinCEN to conduct such supervision. Like other domestic government agencies, to receive beneficial ownership information from FinCEN, state regulatory agencies must also enter into a memorandum of understanding with FinCEN that describes how the agency will protect the security and confidentiality of the information.
- Foreign governments cannot directly access the beneficial ownership IT system—the secure system that FinCEN uses to receive and store BOI—but will be able to request beneficial ownership information through intermediary Federal agencies. Foreign governments may request beneficial ownership information for a law enforcement investigation or prosecution, or for a national security or intelligence activity, that is authorized under the laws of the foreign country. There are two different request channels available to foreign governments: requests made under an international treaty, agreement, or convention; or requests made, when no such treaty, agreement, or convention is available, by a law enforcement, judicial, or prosecutorial authority of a foreign country determined by FinCEN, with the concurrence of the Secretary of State and in consultation with the Attorney General or other agencies as necessary and appropriate, to be a trusted foreign country.
- FinCEN anticipates extending access to the BO IT system to financial institutions subject to customer due diligence requirements under applicable law, along with their supervisors, in the spring of 2025. FinCEN intends to provide additional guidance regarding any specific supervisory expectations for financial institutions that choose to access the BO IT system prior to those institutions receiving access to the system.
- The preparations necessary to receive, store, and use beneficial ownership information will vary depending on the type of authorized recipient. Those interested in accessing beneficial ownership information should first review the Beneficial Ownership Information Access and Safeguards Rule. Depending on the type of authorized recipient, the requirements may include, but are not limited to, the agency:
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- establishing standards and procedures to protect the security and confidentiality of beneficial ownership information received, including procedures for training agency personnel on the appropriate handling and safeguarding of such information;
- providing to FinCEN initially, and annually thereafter, a report that describes the standards and procedures that the agency uses to ensure the security and confidentiality of any beneficial ownership information received;
- providing to FinCEN initially, and thereafter semi-annually, a certification by the head of the agency, on a non-delegable basis, that the agency has standards and procedures that appropriately implement the security and confidentiality requirements;
- establishing or designating, to the satisfaction of FinCEN, a secure system for BOI storage;
- establishing and maintaining a permanent, auditable system of standardized records of the agency’s requests for beneficial ownership information including, for each request, the date of the request, name of individual who makes the request, the reason for the request, any disclosure of such information made by or to the requesting agency, and other information or references necessary to reconstruct reasons for the request;
- conducting an annual internal audit to verify that information obtained from FinCEN has been accessed and used appropriately and in accordance with the established standards and procedures, providing the results of that audit to FinCEN upon request; and
- cooperating with FinCEN’s annual audit of the adherence of agencies to the security and confidentiality requirements to ensure that agencies are requesting and using the information appropriately, including by promptly providing any information FinCEN requests in support of its annual audit.
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