Beneficial Ownership Review

Follow ownership and control through the structure

The review is suited to cases where direct shareholding does not tell the full story: layered companies, cross-border entities, trusts or other arrangements, nominees, conflicting records, or control exercised through agreements or influence. It examines how ownership percentages and other control rights flow through each tier, where the trail reaches a natural person, and what remains uncertain. FATF defines beneficial ownership by reference to the natural persons who ultimately own or control a customer, including through chains of ownership or means other than direct ownership.

This is a focused ownership-and-control evidence assessment, rather than a general customer due diligence review. The question is not simply whether an entity appears in a registry, but whether the available information supports the firm's understanding of who ultimately owns or controls it and who acts on whose behalf.

Compare records and understand registry limits

Relevant material may include corporate registry extracts, constitutional documents, shareholder records, ownership charts, trust or nominee information where available, customer-provided declarations, and prior KYC records. A review can compare sources for dates, names, percentages, control rights and gaps, and record how each conclusion follows from the underlying evidence. Public availability, verification mechanisms, terminology and permitted access differ by jurisdiction and can change; registration in a database is one source to consider, not automatic proof that a relationship is current or complete.

FATF's guidance on Recommendation 24 describes a multi-pronged approach to beneficial ownership information, combining sources such as information held by companies and public authorities or registries. For a particular customer, an evidence trail can therefore require more than a single database result. The appropriate checks depend on the applicable rules, access rights, risk and information available in each country.

• Map direct and indirect ownership percentages and other control rights
• Identify natural persons, nominees or unexplained intermediary entities
• Compare customer declarations with registry and corporate records
• Record discrepancies, missing links and the further evidence or escalation considered

Support a clear KYC decision

An initial discussion can clarify the structure, evidence needed to resolve a discrepancy and questions the firm's decision-maker may need to answer. Depending on the material agreed, the discussion may help distinguish a supported ownership conclusion from an assumption, identify where further enquiry could be proportionate, and explain why the available evidence does not yet close the chain. The firm retains the customer acceptance, risk rating and escalation decisions; advice does not amount to a legal opinion, registry certification or regulatory approval.

Trevor Barritt contributed research and content to a 2019 NICE Actimize article comparing beneficial ownership and KYC registry approaches across the United States, Europe and Asia-Pacific. Registry approaches and requirements differ by country and can change, so establish the applicable jurisdiction and rules for each matter.