A beneficial owner is the natural person who ultimately owns or controls a customer, or the person on whose behalf a transaction or activity is being conducted. Under the Money Laundering Regulations 2017, identifying the beneficial owner is a core part of customer due diligence (CDD). For a body corporate, a beneficial owner is generally an individual who ultimately owns or controls (directly or indirectly) more than 25% of the shares or voting rights, or who otherwise exercises control over the company’s management.
Why beneficial ownership matters
Criminals frequently use companies, trusts and layered ownership structures to disguise who really controls funds. Requiring firms to look through those structures to the natural person behind them is one of the most important defences against money laundering. The MLR 2017 require firms not only to identify the beneficial owner but to take reasonable measures to verify their identity, so the firm understands who it is dealing with.
Where ownership is opaque, or a customer is reluctant to disclose its structure, that itself can be a red flag warranting enhanced due diligence or escalation.
Who it applies to
All firms within scope of the MLR 2017, particularly when onboarding corporate customers, trusts and other legal arrangements.