On Monday, the Financial Crimes Enforcement Network (FinCEN) issued new Frequently Asked Questions (FAQs) regarding customer due diligence (CDD) requirements for covered financial institutions. The FAQs supplement FinCEN’s previously issued FAQs on the topic from July 2016 and April 2018 and deal with requirements regarding obtaining customer information, establishing a customer risk profile, and performing ongoing monitoring of the customer relationship.
The issuance of these FAQs amidst the current regulatory landscape – that is, in the context of FinCEN’s onslaught of guidance surrounding possible fraudulent schemes arising out the current global pandemic – is not a surprise. Indeed, this week’s FAQs further clarifies FinCEN’s expectations that financial institutions take seriously not only their initial duties to conduct risk-appropriate levels of due diligence of their customers, but also continue to monitor the relationships on an ongoing basis and at a cadence that matches any assigned risk assessment.
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