FinCEN Finalizes Rule on Use of FinCEN Identifiers in Beneficial Ownership Information Reporting

On November 7, 2023, the Financial Crimes Enforcement Network, FinCEN, published its final rule regarding the use of FinCEN identifiers when reporting beneficial ownership information. The final rule was subsequently published in the Federal Register on November 11, 2023 with an effective date of January 1, 2024.
To recall, in December 2022, FinCEN launched a consultation on proposed modifications to Statutory Instrument 31 CFR Part 1010 to regulate the access to beneficial ownership information (BOI) reported and filed by entities, set out strict data and privacy security provisions in that regard, and permit the reporting of FinCEN entity identifiers in lieu of otherwise required beneficial ownership information, provided that various conditions are met (please see EventID 19019 in this context for more information).
FinCEN has now drawn up its final rule with respect to the last aspect, the reporting of FinCEN identifiers. In detail, this final rule provides that a reporting entity may report the FinCEN entity identifier instead of information of an individual beneficial owner (i.e. the individual FinCEN identifier), if and only if all of the following conditions are met:
– the other entity holding interest in the reporting company has obtained a FinCEN identifier from FinCEN and shared it with the reporting company;
– the individual is (or may be) a beneficial owner of the reporting company due to holding an ownership interest in the other entity; and
– the individual who is beneficial owner of both the other entity and the reporting company is the same.
Basically, this rule covers circumstances of ownership interests held by other (related) entities which themselves – naturally – have beneficial owners.
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In view of the responses received to the consultation, FinCEN has made some minor adjustment to the propose rule to
– improve consistency in using the terms „another entity“ or „the other entity“ and
– provide more clarity on the issue by revising some terminology.