A beneficial ownership and control, is when a person who controls either directly or through any other person who directs the control of the account and is the person who owns the account and its activities.
As per AML and KYC regulatory requirements, every organization, before onboarding customers, must take reasonable steps to ascertain the true, accurate, and complete identity of the beneficial ownership structure and beneficial owners.
The Beneficial Ownership and Control
Corporate vehicles play an essential role in the global economy, conducting a wide range of legitimate commercial and entrepreneurial activities. However, they have also been misused by criminals to disguise and convert the proceeds of their crimes. The appeal to criminals lies in the fact that corporate vehicles can be misused to circumvent controls by disguising the identity of known or suspected criminals and the source of funds or assets.
Where the organization, has reasonable grounds to believe that a person is or maybe its beneficial owner, the organization must ask in writing to such person requiring him:
(a) To state whether he is a truly beneficial owner
(b) Confirm or correct any required particulars of such person that are included in the request in writing
Organizations must keep a record of the required particulars of the declared and verified beneficial owners as the “record of beneficial owners”.
The information required from the beneficial owner may include the following:
(a) In respect of a natural person:
(i) Full name, including any former names
(ii) Country of residence
(iii) Date of birth
(vi) The date on which that person became a beneficial owner
(vii) The grounds on which that person is considered to be a beneficial owner
(b) In respect of a Person who is not a natural person:
(i) Registered name
(ii) Registered address
(iii) Registration number (or equivalent)
(iv) Country of registration
(v) The date on which that person became a beneficial owner
The FATF definition of beneficial owner in the context of legal persons must be distinguished from the concepts of legal ownership and control. On the one hand, legal ownership means the natural or legal persons who, according to the respective jurisdiction’s legal provisions, own the legal person. On the other hand, control refers to the ability of taking relevant decisions within the legal person and impose those resolutions, which can be acquired by several means for example, by owning a controlling a block of shares.
Beneficial owners include any natural person with a 25% or greater equity ownership interest in a legal entity customer and any person in charge is defined as an individual having significant responsibility for controlling, managing, or directing the legal entity customer.