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Checklist: 10 Ways to Ensure Your Organization is UBO Compliant

As of May 2018, financial institutions now need to comply with new U.S. Treasury Department rules applying to any parties qualifying as “ultimate beneficial owners” (UBOs).
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As of May 2018, financial institutions now need to comply with new U.S. Treasury Department rules applying to any parties qualifying as “ultimate beneficial owners” (UBOs). These new reporting obligations can affect existing client relations and create hurdles for new clients, particularly those located overseas.


Complying with the new Treasury rules should help banks resolve issues they may have been ignoring. “It has been an issue – the [information] on some legal entity accounts has been pretty bad,” says Brett Wolf, Anti-Money-Laundering Analyst at Thomson Reuters Regulatory Intelligence. One regulatory source told Wolf that they knew of banks whose customer files sometimes “had nothing but a phone number, not even a name. That could make for an interesting conversation when you dialed the number.”

“There were problems that needed to be addressed. The banks needed to clean up their data anyway,” he adds.

While compliance with FinCEN rules will be a multi-departmental task, it will present particular challenges for a bank’s customer relations and marketing departments next year. The issue of privacy, for example, could strain client relationships, as a client may find the greater depth of questioning obtrusive. “Say there’s a person who comes in to open an account for a commercial enterprise,” Rowe says. “Now they’ll need to provide all this information that we always tell people not to give out, because of identity theft concerns.”

A bank should be ready to demonstrate in detail to prospective clients what it will do to preserve their data privacy. If a bank has rolled out new measures such as heightened encryption or greater server protections, that should be highlighted in marketing materials and mentioned early in conversations with prospective clients, for example.

Is your organization is prepared and UBO Compliant?

Double-check with this 10-point UBO Compliance Checklist >


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