1. ACAMS Greater Philadelphia Chapter Learning Event September 7, 2017
BENEFICIAL OWNERSHIP
ACAMS Greater Philadelphia Chapter Learning Event
September 7, 2017

2. AGENDA Welcome & Introduction – ACAMS Board
Panelists – Tina Bottaro, Adina Himes – FRB Philadelphia, William Schlameuss - ARC and Dennis Ansbro – Capital One
The Basics of the new CDD rule on Beneficial Ownership - William Schlameuss
An Overview of FinCEN’s Customer Due Diligence Rule – Tina Bottaro
Panel Discussion on Implementing the Rule in Practice – Moderator/Panel
Open Q&A with the Panel – Moderator/Panel
Thank You & Close Out – ACAMS Board

3. PURPOSE OF THE RULE Enhance transparency of legal entities.
Demonstrate US leadership & credibility in combatting financial crime.
Protect US & international financial system.
Support enforcement of AML, sanctions, tax regulations, and combatting terrorist financing.
Support financial institution monitoring efforts.
Codify existing regulatory expectations concerning customer due diligence (CDD)
Adds requirement to identify & verify beneficial owners of legal entity customers
Subject to some exclusions & exemptions
With an optional model form to assist in collection

4. THE 5TH PILLAR
Appropriate risk-based procedures for conducting ongoing CDD to:
Understand the nature and purpose of customer relationships;
Conduct ongoing monitoring to identify and report suspicious transactions; and
On a risk basis, to maintain and update customer information

5. YOU WILL … BEFORE 11 MAY 2018 Prepare for implementation:
A Process for Obtaining Beneficial Ownership or Control Info for 1-5 Individuals.
New Accounts
During Customer Monitoring
Supporting Polices & Procedures
Customer Risk Profile Development
Training Development and targeted training

6. … AND AFTER 11 MAY 2018
New accounts opened for new or existing legal entity customers.
Beneficial ownership information obtained for monitored accounts in normal course of business.
Customer risk profile is updated based on obtained information.

7. WHO IS A BENEFICIAL OWNER?
Ownership Prong: Individual (persons, not entities) that own directly or indirectly 25% or more of equity interest of a legal entity customer.
Control Prong: Individual with significant responsibility to control, manage or direct a legal entity customer.
4 owners + 1 (manager) = 5 maximum
The Certification of a Beneficial Owner form can be found in Appendix A of the rule.
Any person or entity included under either prong is subject to OFAC check.
No additional checking required under 314(a)
FIs may rely on beneficial ownership supplied by the customer, provided FI has no knowledge of facts that would reasonably call into question the reliability of the information

8. “CONTROL PRONG”
Only the Control Prong of the Beneficial Ownership test is necessary for the following:
Charities
Nonprofits
Non-excluded pooled investment vehicles
Key to Control Prong:
Significant responsibility to control, manage, or direct the company. Not just the first ‘titled’ individual available.

10. AND GOING FORWARD Initial information records a point in time
No obligation for continuous update 
Updates are based on the risk profile 
Updates are event driven, when determined in the normal course of monitoring.

11. LEGAL ENTITY VS. NOT A LEGAL ENTITY
Corporation
Limited Liability Company
Partnership, including limited partnerships
Business Trusts (Registered)
Not a Legal Entity
Natural Person
Sole Proprietorship
Unincorporated Associations
Unregistered Trust
An Excluded Entity
A legal entity is created by filing of public document with domestic or foreign government.
Legal Entity Exclusions:
Financial institutions with a federal functional regulator
SEC or CFTC Registered Entities (various)
Insurance Company
Bank Holding Companies
Private Bank Subject to 31 CFR
(Foreign & $1 Million Minimum)

12. EXEMPTIONS

13. THINGS TO DO … Policies Procedures Forms Onboarding Processes
System Changes
Training
Other???

14. PANEL DISCUSSION ON IMPLEMENTING THE RULE IN PRACTICE

15. OPEN Q&A WITH THE PANEL

16. THANK YOU FOR ATTENDING OUR SEPTEMBER LEARNING EVENT!

17. WILLIAM SCHLAEMUESS
William Schlameuss has over 20 years’ experience in regulatory compliance, including BSA/AML/OFAC with a wide range of US branches of major foreign banking organizations from all continents, both as a CCO and a consultant.
Mr. Schlameuss has extensive experience with State and Federal Banking regulators in examination preparation, assistance and response, including assistance in the remediation of written agreements for clients.
Mr. Schlameuss speaks often on BSA/AML related topics, both for in-person trainings and online webinars.