Compliance and risk officers do a tremendous job of identifying and verifying individuals and legal entities. All eyes are on the beneficial owners because it is the way to detect the connections with russia. The beneficial ownership information is crucial to provide evidence revealing connections with russia. Finding the beneficial owner is a way to avoid the risk of being sanctioned and to prove that there are no connections with russia.
Compliance Week writes about the importance of finding beneficial owners. According to the International Compliance Association, it is the only reliable way to prove that you are not violating international sanctions. Consequently, you do not create risks for your business.
russians are looking for different ways to avoid sanctions: offshore companies, shell companies, false beneficiaries, etc. The beneficiaries are the crucial elements to unraveling the whole pile of connections with russian companies.
📌 A beneficial owner is a person who owns a legal entity (more than 25%) and influences its decision-making. Concealment of the actual beneficiary is most commonly used to hide oneself and avoid law enforcement.
Identifying the actual beneficial owners of the sanctioned companies would allow the sanctions to work fully. It can also prevent russian businesspeople from hiding their assets and creating risks for companies worldwide.
Some jurisdictions do not have an Open Ownership Register; in others, data may be inaccurate.
The search for the beneficiary becomes even more complicated when the shareholders are not individuals but legal entities. It is then necessary to investigate the entire sequence of connections before identifying the person whose influence and control exceed the limits in that jurisdiction.
Beneficial ownership data can be concealed using:
- Shell companies
- Complex ownership and management structure
- Bearer shares
- No restrictions on legal entities as directors
- Formal and informal nominee shareholders and directors
- Intermediaries in incorporation.
Today, the most effective tool for finding beneficiaries is RuAssets. It is the most comprehensive database of legal entities, individuals, and PEPs from registries. It is possible to trace connections of individuals and companies across countries, not within a specific country.
Beneficiary disclosure is one of the crucial steps in Customer Due Diligence which is standard for progressive companies. The Financial Action Task Force on Money Laundering (FATF) issued Guidance on Transparency and Beneficial Ownership for countries and financial institutions for Customer Risk Assessment a long time ago. The EU Anti-Money Laundering Directives have made beneficial ownership a key parameter for businesses worldwide.
News 9 April 2021
Data on Fines from the Antimonopoly Committee of Ukraine Are Now in the Express Analysis
The Express Analysis from YouControl now shows fines from the Antimonopoly Committee of Ukraine (AMCU) for violating the rules of economic competition. Previously such information had to be sought in the official public announcements of the AMCU, now it can be checked in YouControl in 30 seconds. The tool will be useful to automate the process of checking a counterparty during tenders.
Blog 25 March 2021
Risks of Cooperation with Counterparties from Countries with a High Level of Corruption
The location of participants or beneficiaries of a company in the so-called risky jurisdictions attracts special attention of the National Bank of Ukraine (NBU) within financial monitoring. We devoted a separate article to this factor. You will find the whole series of articles on risk factors and the provisions of the Law on Financial Monitoring at the end of this article. The Corruption Perceptions Index is a global ranking of countries concerning their corrupt practices.
Blog 19 March 2021
Risks of Cooperation with Tax Evaders
Debts to the Tax Service are one of the risk factors according to the National Bank of Ukraine (NBU). The Express Analysis from YouControl draws your attention to this factor while checking a counterparty and works out if a company has a tax debt for the last available period. We are explaining what this means and why you need to be especially careful while working with such a counterparty. A tax debt is the amount of monetary obligation not paid by a taxpayer in a timely manner.