MONEY LAUNDERING arrangements to retain control over criminally derived assets . A very prevalent and infamous example of this would be the Digital vibes saga . Due to the fact that these criminals use complex structures or legal persons to conceal true ownership makes it often very challenging to trace back to the original source of funds as well as to identify UBOs .
How to combat it The concept of identifying an Ultimate Beneficial Owner ( UBO ) exists in an effort to combat the above . A UBO is effectively the person / s at the top of the tree – who have ultimate benefit from , or ultimate control of an entity and its operations .
Whilst it ’ s usually a natural person majority shareholder holding 25 % of the entity and above , not all entities have a majority shareholding or even shareholding at all e . g .: a listed company having thousands of shareholders with no clear majority holder over the 25 % threshold . In this case you can take a risk-based approach and use a process of elimination , looking first for ownership , and then control e . g .: the CEO , CFO or COO of a listed company , and then identify these individual / s as the UBO ’ s .
In the same way you must identify and verify your clients , the FIC Amendment Act requires that you identify and verify all UBOs .
In closing you can see that there are multiple ways that criminals try and launder money . Together with international guidelines , the FIC has set out the FIC Act which serves as a basic guide / requirement that all Accountable Institutions need to follow in order
SA Real Estate Investor Magazine JULY / AUG 2023 66