Certification of Beneficial Ownership: Understanding the New Federal Rules

treasury building - federal rules

If you’re planning to open an account for your business at a financial institution, you may be affected by new Federal rules under Bank Secrecy Act.

Effective May 11, 2018, all financial institutions — including WEX Bank — are required to collect and verify information about the ownership of legal entity customers.

This means any non-exempt business that opens a new WEX account will be asked for information to help identify the following people:

  • Any beneficial owners, or individuals who own (directly or indirectly) at least 25% of the business
  • A person with control, or someone with significant responsibility for managing the business, like an executive officer or senior manager

The required information includes name, address, date of birth, and Social Security number (or passport number, for non-U.S. individuals).

Why did the government pass these rules?

To help fight financial crime. Legal entities can be abused to disguise involvement in terrorist financing, money laundering, tax evasion, corruption, fraud, and other financial crimes. By identifying whoever ultimately owns or controls such businesses, law enforcement can better investigate and prosecute these crimes.

What businesses have to provide this information?

Corporations, Limited Liability Companies, Partnerships, and any other similar business entities formed in the U.S. or a foreign country.

How will WEX collect this information?

It’s our goal to make the application process as easy and efficient as possible. If you’re applying online, you have the option to save and return later, if you need to gather any information. You can also provide these details via fax, mail, or by talking to a WEX representative.

Should I be concerned about privacy?

We understand that this information is personal and sensitive — however, all financial institutions now have to obtain it in order to comply with the law. At WEX, we’re committed to treating any information we collect with the utmost care, storing it securely and handling it with the same high standard of privacy we’ve always maintained.

Where can I learn more?

For more information about this requirement — including a list of exempt legal entities — please visit our full Beneficial Ownership FAQ.