Comprehensive Learning About Ultimate Beneficial Ownership (UBO) - YouTube

in today's video i'm covering ultimate beneficial  ownership i will clarify how to identify UBOs  

some of the regulations in  place and where you can source  

company information for free so  let's jump right into today's video  

Hi and welcome to FinCrime Agent I'm Marco  Beranzoni, and this is my YouTube channel where  

i'm talking about financial crime prevention and  anti-money laundering related topics. Today's video  

is all about ultimate beneficial ownerships. What  is the ultimate beneficial ownership? For those  

unfamiliar with the AML and financial crime sector,  under the money laundering and terrorist financing  

prevention act; ultimate beneficial ownership  screening is required for particular businesses  

such as: banks solicitors estate agents accountants  and other regulated firms. The criteria used for  

anti-money laundering compliance are continuously  evolving in fact a common phrase known by those  

working in the regulatory compliance industry  is that "change is the only constant", and due to  

this, firms must stay on top of the ever-changing  regulatory environment. However the transparency of  

ultimate beneficial ownership is definitely one  aspect being strengthened across regulations  

and jurisdictions. The AML industry expects  all businesses to know who they're doing  

business with by determining the identity of the  transaction's ultimate beneficial owner. Who is the  

ultimate beneficial owner of a company also known  as the UBO? A UBO is typically defined as a person  

in a corporation who has substantial power at the  top of the tree, typically the ultimate beneficial  

owner holds at least from 10 to 25 percent of  the capital or voting right of the legal entity.  

During a transaction the ultimate beneficial  owner is the individual who ultimately  

owns a legal business or legal person. Some  examples of ultimate beneficial owners may be:  

anyone who has direct or indirect authority  over the account holder a power of attorney  

shareholders or even guardians for people under  the age of 18 years old. Looking at recent laws  

and regulations the ultimate beneficial owner  aspect is also touched within the fourth and fifth  

anti-money laundering directives in fact the eu's  MLD4 also targets ultimate beneficial ownerships  

in a significant way. UBO is determined under  MLD4 when a legal entity owns or control more  

than 25 percent of its shares of voting rights.  In instances where this requirement cannot be  

verified MLD4 enables senior management officials  also to be considered as beneficial owners  

the EU fourth anti-money laundering directive  further required EU nations to retain up-to-date  

ownership information in a central register that  is available to authorities, obliged entities and  

public person with a genuine professional interest  (such as journalists or NGO). In January 2020 also  

the fifth anti-money laundering directive went  live and it continued to look at beneficial  

ownership, introducing measures demanding  that: within 18 months after the fifth mld's  

implementation date UBOs listing created  under the fourth money laundering directive  

must be made publicly accessible; beneficial  ownership regulations must also be followed by  

trusts; and beneficial ownership information  must be made available to authorities or those  

with a genuine professional interest. In order  to promote collaboration and information  

sharing between state agencies UBO national  registries must be interconnected at the EU level  

to guarantee that the information they contain  is accurate and reliable. All member nations must  

improve the ubo verification process and lastly  EU member countries must establish separate UBO  

records for bank accounts which (unlike corporate  UBO registers), will not be accessible to the public,  

and will only be available to the authorities.  How can banks identify UBOs of customers ? 

They would first obtain the relevant documentation  of the organization, the exact requirements vary of  

course by the jurisdiction, AML and counter  terrorist financing regulation standards.  

However, broadly companies must provide complete  and up-to-date information often including the  

company's registration number, name address, its  official status and the name of top management  

employees for verification of legitimacy and  accuracy. Second, review the ownership chain to  

do this they would need to determine who owns  a property of shares or interest in a natural  

or legal person and also whether their ownership  is direct or indirect third ID&V of ultimate  

beneficial ownership, determine which if any of  each individual total's percentage of shares  

managerial control and ownership interest fits  within the definition of ultimate beneficial  

owner. And fourth completing AML and KYC checks  all detected UBOs would have to go through  

relevant AML/KYC checks in a consistent and  efficient manner, filing regularly and retaining  

up-to-date information before we talk about  where to find the company-related information  

let's also touch base on the risk to ensure all  business relationships will be within the firm's  

risk appetite there will be a risk rating  assigned to customers which can vary and therefore  

different approach will be required in line with  the customer's risk level low risk customers UBO's  

in the low risk category can authenticate their  identification by signing a declaration containing  

their personal information a visual verification  against identity documents is usually sufficient  

as well. Medium and High risk customers, further  analysis is necessary if the individual identified  

exhibits any possible exposure to terrorism or  money laundering. Those can include additional  

searches to better analyze their customer's  risk profile aimed to reveal any political  

exposure, negative media coverage and legal  enforcement steps that may contribute to the risk.  

Examine the individual's source of wealth and  money, looking for gaps across income source of wealth

and overall net worths of the customer. Obtaining  extra information regarding the business  

relationships, the purpose and intended nature.  Ensure is in place a frequent update about changes  

in a substantial ownership, this is usually  expected to be reviewed at least annually  

for high-risk customers. Now where to get  the UBO information for uk registered  

companies? You can gather a number of information  free of charge directly from the Gov.Uk  

portal, the company information details provided  in there includes :company information for example  

registered address and date of incorporation  current and resigned offices document  

images mortgage charges data previous  company names insolvency information as well. 

Gathering reliable company information  internationally can be a bit more challenging,  

private organizations can supply this type of  data however beside the third-party data providers  

most developed countries have now in place their  own version of a company registry that should be  

publicly accessible. During my research i found a  useful link on the UK Company House website with a  

list of company overseas registries. They specify  on the portal that this is not a comprehensive  

list of all company registries located around the  world, but is surely a great resource as it contains  

links to company registry for all those  countries that you can see on the screen.  

i will leave in the description of this video as  usual the link directing you to the gov.uk pages  

for both the uk company registry and this list of  links to overseas or registries. And with that i'm  

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Lastly thank you for watching, I hope you've  enjoyed my video and until next time see you soon