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Challenges in implementing the ‘Fifth Pillar’

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  • Molloy, Robert

Abstract

Since the Financial Crimes Enforcement Network (FinCEN) published the customer due diligence (CDD) ‘Fifth Pillar’ rule on 11th May, 2016, there have been a number of articles that have summarised the primary requirements and some have even listed key interpretive challenges and issues. There are many nuances with both design and implementation that are easy to overlook, however. This paper, written from the perspective of the person responsible for writing the business requirements and supporting processes, outlines several key interpretation issues and design/implementation challenges; it also highlights new governance standards and processes that should be constructed to identify ‘triggering events’ and ensure proper due diligence following such an event. At a minimum, this paper may serve as a high-level checklist to help ensure that a covered institution has identified and addressed the key issues driven by the new CDD rule well in advance of the 11th May, 2018 deadline.

Suggested Citation

  • Molloy, Robert, 2017. "Challenges in implementing the ‘Fifth Pillar’," Journal of Financial Compliance, Henry Stewart Publications, vol. 1(3), pages 267-275, December.
    • Handle: RePEc:aza:jfc000:y:2017:v:1:i:3:p:267-275
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    More about this item

    Keywords

    customer due diligence; Fifth Pillar; anti-money laundering challenges; beneficial owner rule; CDD exemptions;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

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