(Corrects second and fourth-from-last paragraph to say that
financial institutions are required to collect information, not
By Anna Yukhananov and Brett Wolf
WASHINGTON/ST. LOUIS, July 30 The United States
unveiled on Wednesday a long-delayed rule that would require
banks to identify hidden account owners in order to curb money
laundering and peer behind shell companies.
The proposed rule would require financial institutions to
collect the "beneficial," or true owners of certain accounts,
and identify anyone who owns at least a quarter of a company or
legal entity, using a standardized format to record the
The information could help the government pursue money
launderers that may try to hide their identities behind shell
companies or other legal entities to make it easier to move
around illegal proceeds.
U.S. authorities have stepped up enforcement of anti-money
laundering laws to clamp down on conduct ranging from drug
trafficking to terrorism and organized crime.
"The beneficial ownership requirement is intended to provide
us with an important new tool to track down the real people
behind companies that abuse our financial system to secretly
move and launder their illicit gains," David Cohen, Treasury's
undersecretary for terrorism and financial intelligence, said in
Banks have been anxiously awaiting the proposal's language
for more than two years, fearing that a strict approach would
force them to spend huge amounts of time and money investigating
the beneficial owners of thousands of legal entities with which
they do business.
But the proposed rule suggests banks would only have to
collect information about the people behind legal entities and
verify identities, but not check that the information is
A senior Treasury official said that even if the ownership
information is not verified, simply having the names of
beneficial owners could be useful.
If someone provides false information to a bank,
investigators could use that information "in demonstrating
unlawful intent and in generating leads to identify additional
evidence or co-conspirators," according to the proposal.
Some banks have already begun collecting beneficial
ownership information in preparation for the rule. But the
proposal requires a standardized format for collecting the
information, meaning efforts so far may have been wasted, said
Rob Rowe, a lawyer with the American Bankers Association (ABA),
a trade group.
"It could be worse than starting from scratch because you've
got to take what's there and adapt it and restructure it, so it
may or may not be good," Rowe said, speaking about banks'
current methods of collecting information about beneficial
He said the ABA is reaching out to its members to collect
feedback on the proposal.
The proposed rule is not binding and is still open for
public comment for 60 days.
(Reporting by Anna Yukhananov in Washington and Brett Wolf in
St. Louis; Editing by Lisa Shumaker)