The Ultimate Beneficial Owner, shortly known as UBO, means the legal entity that is the beneficiary of the company. According to the regulator, banks, investment companies, insurance companies, financing companies and all other financial companies must disclose the UBO for various reasons. One of these reasons is to prevent serious crimes such as money laundering and terrorist financing. The lack of disclosure of UBOs paves the way for people to launder money through companies. Therefore, countries should pay attention to UBO in the fight against money laundering and terrorist financing.
• People who have at least 25% stake in the capital of the legal entity
• People who have at least 25% voting right in the general assembly.
• People who are beneficiaries of at least 25% of the capital of the legal entity
FATF and the European Union are both agree that UBOs have ML / TF risk. Important information and obligations regarding the UBOs have been reported in the EU’s Fourth Anti-Money Laundering Directive (MLD4), Fifth Anti-Money Laundering Directive (MLD5) and FATF Recommendations. In addition, according to MLD4, UBO screening must be done to senior managers other than the above criteria.
Reputation is very important for companies because the company's reputation affects customers' trust in the company. Therefore, companies want not to be on the agenda with bad news and to protect their companies from the factors that will harm their reputation. Collaborating with fraudulent companies or not meeting AML requirements will cause companies to face fines. This leads to the loss of the company's reputation.
One way to avoid this is to do a UBO scan. UBO scanning is a mandatory process for companies that are responsible for anti-money laundering and counter-terrorist financing laws. The companies check the counter company's directors by scanning the Ultimate Beneficial Ownership in their business agreements. This screening determines whether the company's owners or shareholders will pose a problem for their companies. Companies performing UBO scanning may decide not to make business deals with high-risk companies to maintain their corporate reputation.
Companies that do not perform UBO scanning face various risks. Failure of a company to carry out UBO checks causes it to fail to detect risks. For this reason, companies may cooperate with criminals or fraudulent individuals without realizing them and may harm company reputations. Apart from this, companies that do not perform UBO checks are punished by regulators according to AML laws if they are under the AML / CFT obligation.
Companies can perform UBO scans in seconds with the Sanction Scanner. Companies can scan owners and shareholders of companies in business deals between AML and PEP data from more than two hundred countries and identify risks. Protect your company's reputation and ensure AML compliance by scanning UBO right now. You can contact us for detailed information about UBO scanning.