Do you know who you’re really doing business with? It has never been more important to know who the ultimate beneficial owners of your clients and business partners are, whether you are managing your credit risk or complying with UK AML regulations.
Those who don’t, not only risk bad debt but could also open themselves to investigation and criminal charges.
Red Flag Alert has revolutionised how UBO data is delivered. Making it quick and easy to understand who you will be working with without slowing down your process.
Click through to find out how SMEs to enterprises can use Red Flag Alert for kyb compliance.
An ultimate beneficial owner, essentially, is anyone who owns or has voting rights of over 25% of a business. This can be hidden effectively by creating a web of companies, often splitting ownership of assets between them. Often those that wish to hide their ownership of an asset are engaged in criminal activity or undesirable to do business with.
Any company that falls under UK anti-money laundering regulations is legally required to know and record the UBO as part of their AML requirements. Those who are found not to be compliant risk harsh punishments, including imprisonment.
Even if a company is not bound by AML regulations, knowing who they are doing business with is an important part of any due diligence or risk management process and lets them make better decisions and avoid bad debts.
Find the company using their name or company number. Click on the relevant company to bring up a report.
The report tells you who has ultimate beneficial ownership over the company. You can find more information on other businesses and directors in the company’s family tree by navigating to the company structure tab.
Use Red Flag Alert to perform customer due diligence and anti-money laundering checks on the UBO. You can also conduct advanced due diligence if you suspect they are a politically exposed person or on an international sanctions list.
Decide whether to accept, reject or report the business based on the risk profile of ultimate beneficial owners.
Failure to comply with UK anti-money laundering regulations can result in a prison sentence of up to 14 years or a hefty financial penalty.
In December, National Westminster Bank (NatWest) was fined nearly £265 million for anti-money laundering failures.
Understanding ultimate beneficial ownership is complex. Companies House does a good job of recording and displaying corporate ownership. But corporate structures are set up to enable fraud and financial crime by masking the true beneficiaries behind a business.
Ultimate beneficial owner checks are just one small part of Red Flag Alert’s wider anti-money laundering package. We allow you to check, onboard and monitor, all with one comprehensive platform.
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