The Importance of Identifying Beneficial Owners

If you are a customer service representative responsible for opening new accounts, you are probably well versed by now with the process of identifying, verifying and certifying the beneficial owners of a legal entity customer. You know “when” to do it and “how” to do it, but maybe you’ve wondered “why” you do it. The whole purpose behind the Beneficial Owner Rule is to get to the “heartbeat” of an entity, or in other words, the individual(s) that truly own and/or control that legal entity. Several years ago now, you may recall news about the “Panama Papers” or documents leaked from a Panamanian law firm utilizing legal entities to facilitate international money laundering. That event really illustrated to the world how legal entities (or a structure of multiple legal entities) from the United States can easily be used to launder money and hide who is actually doing it.

Kevin explains more in the video.

Video Highlights:

• Financial institutions must identify, verify and certify the identity of beneficial owners of legal entities.
• The Beneficial Owner requirements are an essential part of a financial institution’s BSA/AML program.
• Since creating a legal entity is often quick and easy, they are often used by criminals to launder money.

Published
2024/02/07