Who Can Access the BOI Database?

As part of ongoing efforts to enhance financial transparency and combat illicit activities, the Financial Crimes Enforcement Network (FinCEN) issued new FAQs on April 18, 2024, focusing on the access protocols for the Beneficial Ownership Information (BOI) System (BO IT System). This database is integral to the implementation of the Corporate Transparency Act (CTA), as it stores all data collected through Beneficial Ownership Information Reports (BOIRs). The question stands: who can access the BOI database?

While this information is not directly accessible to the public, understanding who can access yours and your clients information and how they can use it is important to know. The FAQs provide detailed insights into authorized recipients and the phased access plan, including specific requirements for different types of agencies, and how these entities should prepare to use the BO IT System effectively.

Detailed Phased Access to Beneficial Ownership Information

FinCEN’s strategic phased approach aims to ensure a secure and controlled rollout of BOI access:

Spring 2024 – Pilot Program Initiation:

Select Federal agency users will begin accessing the BO IT System under a pilot scheme, marking the first phase of the access rollout. Summer 2024 – Expansion to Federal Agencies: Access will be granted to Treasury offices and other Federal agencies actively involved in law enforcement and national security, all of which are already parties to memoranda of understanding with FinCEN related to the Bank Secrecy Act information.

Fall 2024 – Inclusion of State and Local Entities:

This phase will extend BOI access to additional Federal agencies and introduce State, local, and Tribal law enforcement agencies into the system, contingent upon establishing required memoranda of understanding.

Winter 2024 – Facilitating Foreign Requests:

Intermediary Federal agencies will receive access to handle and process requests for BOI from foreign governments, enhancing international cooperation. Spring 2025 – Access for Financial Institutions: Financial institutions that are subject to customer due diligence requirements will gain access to the system, aiding in regulatory compliance and risk management.

Procedures for Requesting Access to BOI

For Federal Agencies

Federal entities involved with national security, intelligence, or law enforcement can request access to the BO IT System by:

Establishing a memorandum of understanding with FinCEN that underscores the measures taken to protect the BOI’s security and confidentiality.
Adhering to the Beneficial Ownership Information Access and Safeguards Rule, which details the prerequisites for access.

State, Local, and Tribal Agencies

These agencies are eligible for BOI access under certain conditions for use in investigations or enforcement actions:

Authorization must be granted by a court of competent jurisdiction.
They must have a memorandum of understanding with FinCEN that specifies their information security and confidentiality safeguards. State regulatory agencies overseeing financial institutions for compliance with customer due diligence standards might also seek beneficial ownership information from FinCEN to aid their supervisory duties. Similar to other domestic government bodies, these state agencies must enter into a memorandum to access beneficial ownership information from FinCEN.

International Access Via Intermediary Federal Agencies

While foreign governments cannot directly access the BO IT System, they can request BOI through U.S. Federal intermediaries if:

The request complies with existing international treaties, agreements, or conventions.
For countries without such treaties, requests must be made through recognized foreign judicial or law enforcement authorities, as verified by FinCEN and other relevant U.S. entities.

Are You Prepared to Handle BOI Reporting?

Another FAQ covered what steps authorized recipients should take to secure and manage BOI appropriately, ensuring that your data is in good hands:

1. Security Protocols and Confidentiality:

Develop and enforce strong security practices to protect BOI.
Regularly submit certifications and detailed reports to FinCEN to demonstrate adherence to these practices.

2. System and Audit Requirements:

Implement a secure system for BOI storage that satisfies FinCEN’s standards.
Keep auditable records of all BOI requests and their justifications.
Conduct internal and cooperate with FinCEN’s annual audits to ensure proper use of the information.

The newly issued FAQs by FinCEN on April 18, 2024, clarify the access strategy and operational requirements for using the BO IT System, ensuring that all authorized recipients are well-prepared to handle Beneficial Ownership Information responsibly and securely. While the direct application of this information might not pertain to you, it is great information to know in case clients wonder what their reports are being used for and by who.

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Who Can Access the BOI Database? – FinCEN FAQs Provide Insight