Beneficial Ownership: What is it about?

Beneficial ownership refers to the person or persons who ultimately own or control an asset (for example, a property or a company). It is vital to emphasise that such ownership control could benefit from its establishment either legally or illegally. A drug trafficker for example could set up a car renting service in order to appear to have legal sources of income from renting out cars for personal use while in reality the money is derived from the sale of drugs. Therefore, the identification and verification of beneficial ownership are very critical requirements for combating every forms of financial crime, tax evasion and corruption, fraud and money laundering, to trafficking and terrorist funding.

Who are your customers, vendors and third parties? Do you really know them? Do you have a full understanding of their structure & complete ownership? Many criminals or legitimate businesses would deliberately try to create multiple layers of ownership using complex but valid corporate structures across various borders which in turn makes the ownership and money movement almost untraceable.  Additionally, the presence of offshore financial secrecy havens such as the Cayman Islands only goes to further complicate beneficial ownership information.

The 5th EU Money Laundering Directive and the Financial Action Task Force (FATF) Recommendations 24 & 25 provides a comprehensive guidance towards combating the ability to disguise beneficial ownership. This guidance should be employed in tandem with regular training of your employees responsible for performing due diligence, Ongoing due diligence and monitoring of business relationships, Employing enhanced measures for your high risk clients and adopting a risk based approach to customer due diligence.

Please kindly note the content of this writeup is only intended to provide general information and not to provide any legal advice. Also, if you would like to know more about this subject matter or any other areas within my line of interest, you are most welcome to get in touch with me via email contact@emgfinancialcrimeconsulting.co.uk

Fraud & Coronavirus (COVID -19)

As the coronavirus pandemic wreaks havoc and devastates nations across the globe, it is despicable that many individuals and businesses have fallen victim to fraudsters more especially the older and vulnerable people who are isolated from family and friends. The truth is that we are in precarious times, hence it is therefore critical for us to prepare for a dramatic increase in various fraudulent activities, fraudsters would constantly seek ways to exploit our fears and anxiety, the disruption of our normal daily routines also presents an increased risk more especially during this emergency times.

The United Kingdom’s (UK) COVID-19 Fraud watch group, a cross-sector and cross-industry coalition of trusted partners (including the Cabinet Office and City of London Police) who come together to share  information and warn the public, private and third sectors about COVID-19 fraud risks and preventative actions. Below are some outlined fraud risk by this group

Current COVID-19 Fraud risks

• Procurement fraud (esp. PPE equipment from overseas)

• Benefit fraud (including phishing emails and fake claims)

• Online shopping fraud (esp. fake medical goods)

• Impersonation of HMRC, DWP, FCO and travel companies

• Fake applications for government support/grants

• Payment diversion fraud

• Fake online communication sites (esp. including domains using 'Zoom')

• Authorised push payment fraud

• Charity impersonation fraud

• Romance fraud

Anticipated and/or emerging issues

• Social engineering techniques adapting to focus on COVID-19

• Fake charities or businesses being set up to access grants/support

• Hacking and DDOS attacks

• Ransomware targeting the health sector and social services

Below are some tips I have put together to help prevent the following Fraud Risk as highlighted above.

• Be sceptical if you receive an email, text or WhatsApp message about the Coronavirus, and never click on any attachments or links. 

• If you believe you have been a victim of scam, report your suspicions to the UK Action Fraud 03001232040 on / similar law enforcement in your country of residence.

• It is critical for businesses at this time to implement additional verification methods before making payment to reduce the risk of payment diversion fraud.

•    Please do not allow yourself to be pressured into donating money, research any charities or crowdfunding sites soliciting donations.

 • Having total control of personal data is extremely important, do not provide your information such as your full name, address and date of birth as fraudsters can use this data to steal your information.

• If you are to make purchases online, please carry out an effective due diligence checks to ensure credibility.

• Install latest app updates or software to protect your devices from the latest threat.

Please kindly note the above preventive tips is not exhaustive, I urge my readers to be on guard for COVID-19 scams and to look out for vulnerable family members, friends and neighbours who may become target for fraudsters and If you would like to know more about this subject matter or any other areas within my line of interest, you are most welcome to get in touch with me via email contact@emgfinancialcrimeconsulting.co.uk