Mapping ownership structures can sometimes feel like searching through a maze. Especially when multiple layers and international entities are involved. Yet that is exactly what will soon be expected of banks and, indirectly, corporates.
The European Banking Authority (EBA) is working on stricter anti-money laundering rules. Banks will soon have to provide more insight into who is really behind an organization. This means that even intermediate layers of ownership and complex structures must be transparent. Although these rules officially apply to banks, they have a direct impact on companies that are part of the KYC process.
What is changing
The EBA not only requires an insight into the ultimate stakeholders, but also into all intermediate layers. The definition of a complex structure is broadening, requiring more frequent clarification of exactly how the structure is put together. This requires more and more detailed information, such as organizational charts.
The Dutch Banking Association (DBA) warns that some requirements are too stringent. Especially the mandatory collection of data on parties with whom there is no direct relationship creates a lot of extra work without always adding value. They plead for a risk-based approach and better definitions of complex structures. After all, not every international structure is automatically complex or risky. Read more about the reaction of the DBA here.
Why this also affects your compliance processes
These rules are directed at banks, but you as a company will notice the consequences immediately. After all, banks need information to meet their obligations. Do you have an international or tiered structure? Then you can expect additional questions or more requests around documentation more often. Without clear information, you run the risk of delays in onboarding or periodic reviews.
What you can do right now
The pressure for transparency is increasing. Organizing your ownership data properly now will prevent delays and additional questions later. Start with:
- Mapping your ownership structure, including intermediate entities
- Record who has control where, down to the level of ultimate stakeholders (UBOs)
- Working with reliable, current and verifiable sources
- Analyze where the risks lie: not every structure is complex, but without explanation it may seem so
Interesting read: Preparing for the AMLA: Four steps to a watertight AML framework
Clear ownership structures are not only a requirement, but also an opportunity to keep a grip on risks and information requests. Altares D&B helps you make ownership and control structures transparent, globally and down to UBO level. Including intermediate entities. Our data not only provides overview, but also context. So you are better prepared for questions from banks and avoid unnecessary delays in your KYC processes. Read more about our compliance solutions here.
Conclusion
The rules are getting stricter, the expectations higher. Investing now in transparency and control over your ownership structure will prevent delays and keep you ahead of the rules rather than behind them. It's not just a requirement, but an advantage.
