Beneficial ownership compliance is in flux. Even experienced legislation watchers and savvy compliance experts are confounded by erratic posturing and mixed messages emerging from global jurisdictions.
We’ve followed the turns and twists as bankers, lawmakers, and business people wrestle to balance integrity in anti-money laundering programs with sensitivities about investor confidentiality and compliance costs. Against this backdrop, debates persist over shell company formation rules while a growing chorus of voices continues to press for public registers of beneficial ownership.
In the past couple of months:
— Fearing fallout affecting financial services industry customers, leaders of British Overseas Territories tussled with the UK parliament to try to reverse the House of Commons' decision to impose public registers. One activist group in the British Virgin Islands this month signaled it was considering taking its case against public registers to the UN.
— In New Zealand, the Ministry of Business, Innovation, and Employment is eager to increase the transparency of limited partnerships and companies. At the same time, however, Wellington regulators plan to exclude trusts from recently shored-up company beneficial ownership requirements, citing their longstanding privacy and confidentiality benefits.
— Although hailed as a victory for transparency, new provisions in India’s Companies Act addressing beneficial ownership are reportedly creating confusion for compliance professionals. Ambiguous definitions of what constitutes “significant influence” on a company’s operations, for example, are raising questions about shareholders' filing obligations.
Meanwhile, a commotion erupted in the U.S. last month when illicit finance experts descended on Congressional corridors to assail a draft bill markup granting 18 months’ safe harbor from the Treasury Department’s Customer Due Diligence (CDD) rule. That rule, which went into effect in May, imposed new requirements on covered financial institutions to identify and verify the identity of beneficial owners of legal entity customers.
— In Delaware, long a U.S. haven for anonymous incorporation, the Secretary of State in June surprised many observers by endorsing proposed national changes to incorporation laws that would shift responsibility for corporate ownership laws away from states in favor of the federal government.
Are you ready to work with a beneficial ownership diligence provider with deep expertise on the shifting regulatory terrain and the right compliance tools?
While lawmakers and businesses sort out their showdowns, our beneficial ownership compliance product, IntegrityRisk OwnerCheck, helps clients stay in compliance every day.
Our research team uses its extensive global business knowledge and native fluency in multiple languages to conduct focused and accurate public record checks. We uncover details regarding beneficial ownership and affiliated party information to assist clients in meeting regulatory requirements for just about any purpose — including real estate transactions, private wealth matters, and third-party / vendor diligence.