AML Digest July 2018 AML Digest July 2018

Published by Simbiosis Inc. AML Digest July|August 2018 >> IN THIS ISSUE Beneficial Ownership This issue is dedicated to Louis Parris a deep dive into the issue of Beneficial Ownership (BO) which has far reaching impli- cations over a wide spec- trum including risk, transpar- ency, blacklisting, De-risking and BEPS. It lays out the background which is critical to understanding why BO is A colleague in the anti-money laundering field recently remarked that in at- tempting to discover the beneficial ownership of some companies, it often seems like when you peel back a layer of identity and you think you are going to see what you should be seeing, there is often another layer to be shed; this could continue indefinitely to the point where you want to give up in frustration. Beneficial ownership has taken the spotlight recently as regulators in Europe and the US seek to introduce more tools in addi- tion to FATCA, CRS, under BEPS CbCr, and other “It is extremely difficult to quan- Anti-money Laundering rules which are de- tify with any precision the ex- signed to discover on the one hand who may tent of misuse of corporate ve- laundering money and on the other who are hicles for illicit purposes. None- placing what assets offshore. The push toward theless, a number of reports transparency in beneficial ownership has accel- and surveys have concluded erated since the publication of the “Panama that corporate vehicles are used Papers” leak in 2016. extensively in criminal activities. so important. For example, a recent survey Without doubt the vast majority of the world’s conducted of EU member States corporations are formed for legal purposes and indicated that almost every conduct legal business. However the rise of cor- criminal act, including economic ruption, white collar crime, the illegal drug trade crimes, involves the use of legal and tax evasion has seen a rapidly increasing persons” tendency to subvert corporate entities for illicit activity. An OECD report “Behind the Corporate Veil -Using Corporate Entities for Illicit Purposes” states “It is extremely difficult to quantify with any precision the extent of misuse of corporate vehicles for illicit purposes. Nonetheless, a number of reports and surveys have concluded that corporate vehicles are used extensively in criminal activities. For example, a re- cent survey conducted of EU member States indicated that almost every crimi- nal act, including economic crimes, involves the use of legal persons” Louis A. Parris Dip (Compliance) FICA; Certified Professional | CAMS | CAMS-Audit Louis Parris is the editor of this newsletter. Louis has over 30yrs commercial banking experience and is a highly qualified compli- ance consultant. He has written several articles for the Barbados Business Authority and guest lectured at the University of the West Indies (UWI) Cave Hill Campus. Beneficial ownership seeks to establish where both ownership and control reside in corporate vehicles. A prima facie ownership may not be the same as control. In October 2014 the Financial Action Task Force (FATF) issued “FATF guidance - Email: [email protected] | Tel: 1246 426 3394 | 1246 228 9147 | Cell: 1 246 234 7327 1