The challenge of identifying beneficial ownership
Understanding beneficial ownership is an important component of due diligence from both a regulatory and reputational risk perspective. But it’s not easy. Countries vary in the amount of financial data they’re required to disclose, and disclosure of ownership is even less mandatory. Regions and regulators also differ on what thresholds of ownership define beneficial ownership, and that’s before you consider the complications of circular ownership (companies owning themselves). Some companies will also deliberately obscure their true ownership/control within complex corporate families.
Our corporate ownership data is compiled from hundreds of sources, cross-referencing information against M&A deals and filed accounts. Our data visualization tools help interpret these complex structures and illustrate paths and percentages of ownership and control. We also offer a specific tool to help the researcher hone in on beneficial ownership, according to their chosen definition.
Our solutions - Automating your third-party due diligence program
Our solutions can help you manage reputational and compliance risk with third parties, and confidently investigate and monitor Beneficial Ownership. Our data and tools support many due diligence aspects of AML and GRC program management. Specializing in private company information for over 25 years, we’re the best source for identifying beneficial ownership with:
• 25+ years' exerience and 140+ alliances with leading partners around the world
• All external data enriched with in-house propietary M&A research
In addition, our simple-to-use Compliance Catalyst
solution runs risk analysis on companies, their directors, shareholders and corporate groups, combining extensive company data from our Orbis platform with your own risk models. You can analyze risk exposure from your business partners, suppliers, vendors, agents and clients more efficiently and to high regulatory standards—so your analyst’s time can be focused on real risks identified.
Unravelling corporate structures — Understanding beneficial ownership and introducing new tools for due diligence
Our recent webinar explores beneficial ownership and how to practically go about unravelling complex corporate ownership structures for third party due diligence/ KYC processes. Former U.S. federal prosecutor Michael Volkov and Bureau van Dijk compliance specialists Ted Datta (UK) and Bill Hauserman (Americas) discuss:
Our recent webinar explores how organizations can efficiently and effectively address third party risk in the current climate. Our panelists Michael Volkov, former U.S. federal prosecutor and Bureau van Dijk’s compliance specialists, Ted Datta (UK) and Bill Hauserman (Americas) cover:
1. Why organizations still have a way to go
to effectively manage third-party risk
2. Regulatory expectation
for due diligence of all customers and business partners (third-parties)
3. Implementing a reliable and scalable
due diligence process that covers all third-parties
Over 1200 people have watched the webinar globally with comments such as:
“I attend seminars and webinars on third party due diligence on a regular basis, but this one provided me with more practical information than all the others combined".
Watch the replay of the video webinar and download our slides.
Financial Institutions: KYC, AML, CDD, beneficial ownership compliance
The Financial Crime Enforcement Network's (FinCEN’s) Final Rule on Beneficial Ownership and Risk-Based Customer Due Diligence
is the fifth pillar for financial institutions to address the risk of corruption, money laundering and tax evasion, addressing lack of transparency of the beneficial owners of bank accounts. It requires covered financial institutions to establish and maintain processes to identify and verify beneficial owners of legal entity customers. Beneficial ownership, under the final rule, can be in relation to either "ownership", where an individual directly or indirectly has 25% or more equity, or "control", where an executive has significant power to control, manage, or direct an entity (such as a CEO).
Covered financial institutions have a little less than two years to comply with the new rule. They'll need to establish and maintain processes to identify and verify beneficial owners of legal entity customers when opening a new account, and have appropriate risk-based procedures for conducting ongoing customer due diligence (CDD). For financial institutions that need to comply with AML 4, they will have to go further, and comply in less than a year.
However, any financial institution that cares about risk, including reputation risk, should make sure they have the right beneficial owner, and add it to their current customer due diligence AML processes. The risk of not investigating and knowing the beneficial owner of entity customers is very real, as the Panama Papers recently exposed. The extent to which shell companies have been set up to deliberately conceal ownership, has been astounding. Former federal prosecutor Michael Volkov stated during our recent webinar
that the two key words for any organization in 2016 will be "beneficial ownership"
. So if it's possible to investigate beneficial owners now, and easy enough to do with the right tool, why would you wait or risk having the wrong information? To see a demo of our new visualization tools for corporate structures, email us, call us at 212 797 3550 or register for a free trial of Orbis.
Corporations: compliance with anti-corruption regulations, third party due diligence (KYV, KY3P, KYC) and trade compliance
Current third party due diligence practices in corporations are falling short of anti-corruption regulatory expectations and leaving many organizations exposed to reputational and compliance risk. The Panama Papers highlighted the need for better transparency on ownership links across the world and regulators are starting to increase their scrutiny of corporations. More than ever, it is imperative that distribution, trade, and procurement functions are able to know with whom they are doing business and better research the beneficial owners of their business partners, customers, suppliers, vendors, distributors, resellers, and agents during the third party due diligence process.
Unfortunately, too many corporations are employing cumbersome manual processes and are daunted by the task of efficiently identifying beneficial owners and other risk factors with third parties.
Current processes are leaving companies exposed (see video), and the reputation stakes for big brands is just too high to be associated with organizations with corrupt intent. Implementing what regulators consider “an effective compliance program” for thorough due diligence on business partners and customers and should include a process to research and monitor the beneficial owner. To find out how our solutions can help you with your third party due diligence processes, and see a demo of our new visualization tools for corporate structures, email us, call us at 212 797 3550 or register for a free trial of Orbis.
Talk to us about our range of solutions and we can show you how you can tailor Compliance Catalyst to suit your workflow and risk methodology and integrate data from our products with your information. We can even create a completely customized solution.