(3) Third, the Financial Account Tax Compliance Act (FATCA) requires foreign financial institutions to report to the IRS identification and income information on U.S. taxpayer accounts.  FATCA requirements apply to all financial institutions worldwide; The United States has negotiated intergovernmental agreements with 112 jurisdictions to implement FATCA, and financial institutions in countries that do not have intergovernmental agreements remain subject to FATCA reporting requirements. Since legal entities opening an account in one of these 112 foreign countries would be required to disclose beneficial ownership information in the United States, opening a bank account outside the United States would not provide a significant advantage in terms of concealing beneficial ownership information over opening an account in the United States. jj) Customer`s bank. The receiving bank to which the payer`s payment order is issued, if the payer is not a foreign bank or bank, or the originator, if the payer is a foreign bank or bank. Some commentators have called on FinCEN to include a “fallback provision” in the ownership domain to require the collection of beneficial ownership information for at least one person with a significant interest in the legal entity, even if no beneficial owner meets the minimum ownership threshold. Such a provision was initially discussed in the ANPRM for this regulation, but was not included in the NPRM because many commentators had expressed concerns about the practical impossibility of this approach. As noted in the NPRM, commentators questioned the feasibility of benchmarking each owner to determine who “has at least as much interest in the business as any other person.” We agreed with this assessment and removed this provision, and we do not believe that the benefits of reintroducing it would outweigh the difficulties that clients and front-line employees would face in implementing it. While we declined to include this provision in the final rule, a risk-based approach for their institutions allows financial institutions to determine that certain higher-risk circumstances may warrant the collection of beneficial ownership information for at least one retention-of-title individual, even if no beneficial owner meets the 25% threshold. (2) is located at a fixed address (other than an e-mail address or post office box) in a country where the foreign bank is authorized to carry on banking activities, in which place: (A) investment funds or similar mutual funds. A mutual fund or similar mutual fund that issues shares that are made available to the general public and that are subject to regular net asset valuation and periodic redemptions; or Having a consolidated and clear customer due diligence framework in place will help address these issues. As part of this framework, the explicit establishment of CDD requirements in these regulations regarding (i) understanding the nature and purpose of customer relationships and (ii) conducting ongoing monitoring will allow for more consistent implementation, testing, monitoring and enforcement of these expectations.
As regards the beneficial ownership requirement, the requirement for all financial institutions concerned to identify and verify the identity of beneficial owners in the same way and according to the same definition also promotes consistency across sectors. The requirement for the financial institutions concerned to operate within a clear framework of customer due diligence will promote a level playing field within and within the financial sectors.