The U.S. government has amended rules to require financial institutions, like Bank of Washington, to collect and verify specific information from legal entities (businesses) establishing relationships with us. These new rules help fight financial crime. Because legal entities can be abused to disguise involvement in money laundering, terrorist financing, tax evasion, corruption, fraud, and other financial crimes, requiring the disclosure of key individuals who own and/or control a business helps law enforcement investigate and prosecute these crimes. Bank of Washington is required to collect this information, and we have provided details regarding this change in the frequently asked questions (FAQs) below.
Frequently Asked Questions (FAQs):
Federal regulations now require all financial institutions to obtain and verify information about the key individuals who ultimately own and/or control a legal entity to help law enforcement investigate and prosecute crimes.
A beneficial owner is defined as any individual who owns—either directly or indirectly—25 percent or more equity interest in a legal entity.
Also referred to as the control person, this is the person with significant responsibility for managing the legal entity. Generally, this is the individual who has the authority to act on behalf of your legal entity to make decisions related to financial relationships.
For each person named on the certification, we are required to obtain their legal name, physical address, date of birth, and social security number (SSN). If they are not a U.S. citizen, then a passport number may be provided in lieu of the SSN. Additionally, we will need a copy of a government-issued ID, like a driver’s license or passport, for verification of each named individual.
The beneficial ownership information is required when a new account is opened and/or a new loan is obtained. It may also be required if you request or conduct certain higher risk services, such as international wires.
There are a few exceptions to the collection of beneficial ownership information. It is not required to be collected for government agencies, publicly traded companies, sole proprietorships, or voluntary unincorporated associations (i.e., youth sports leagues or community organizations).
Once Bank of Washington has obtained a beneficial ownership certification for your legal entity, we may ask that you confirm the information when you open additional new accounts or conduct higher risk services. Please let us know if there is a change in ownership or control of your company so we can obtain an up-to-date certification that reflects accurate information.
Yes. You would simply mark the box indicating there is no individual with beneficial ownership and complete the section for the control person.
The individual requesting the new account is generally the person to complete the certification. This could be the same individual named as the control person, or someone who has been designated by that individual to establish bank relationships for your legal entity.
We are required to maintain this information as part of our records that are associated with your legal entity. We treat this information with the same high level of confidentiality and security as we do all our customer information.
Indirect ownership means your legal entity may be owned by one or more legal entities. We are required to obtain information on the individual persons behind those layered entities who ultimately have the equivalent of 25 percent or more ownership of your legal entity.
Initially, one might think ABC, Inc. has no owners with 25% or more equity. But when you look at the individuals who own Doe, LLC, indirect ownership is evidenced that when combined with direct ownership, applicable beneficial owners are revealed.