Challenges of finding the ultimate beneficial owners in AML and ATF

Author: Juan Carlos Ariza, CAMS-FCI

Identifying the ultimate beneficial owners (“UBOs”) in accounts under the control of individual may not be necessarily difficult, although there are always exceptions. However, in the case of business accounts it’s another story. With legal structures and corporate vehicles, there is still a grey area regarding the meaning of ownership and control, specifically in terms of what percentage of ownership is considered “control”, or who can have control over the account. Furthermore, the different roles within different vehicles and structures complicate things even more. Moreover, corporate vehicles incorporated in offshore financial centers and legal structures subject to the laws of these jurisdictions makes this task even more challenging.

As the AML and ATF environment demands stronger controls to prevent the use of the financial system by criminals to launder money or to finance terrorism, and to detect and report suspicious activity, identifying UBOs of Offshore Entities becomes critical and indispensable. Consequently, this paper will focus on the challenges to identify the UBOs in Offshore Entities.

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