During the corporate customer onboarding process, identifying the natural person who has the ultimate ownership of the company is a must. Retrieving ultimate beneficiary information is always the most time-consuming part in processing corporate KYC.

Photo by U.S. Mission Argentina

Kenneth Blanco, the head of Treasury’s Financial Crimes Enforcement Network, who is at the forefront of reinforcing anti-money laundering law for virtual asset service providers, announced creation of beneficial ownership registry. At a conference on financial crime enforcement hosted by the American Bankers Association and the American Bar Association, Mr. Blanco said “criminals thrive when they have somewhere to hide.” He highlighted the lacking information about who controls businesses incorporated in the United States is creating a “dangerous and widening gap” in the country’s national security.

Treasury officials, including Mr. Blanco, have previously supported the creation of a beneficial ownership registry, which would give financial authorities and banks access to information on who owns companies incorporated in the U.S. The White House announced a statement urging the House to pass the bill to change the U.S.’s anti-money-laundering regime.

The National Federation of Independent Business, the main opponent to the bill who represents small and medium-sized businesses, expressed its concerns “disclosure of beneficial ownership information is too burdensome to small business.”

However,  the bill that would create a registry passed in the House of Representatives, providing a way to filter out shell companies that only exist on paper.

In the future, ultimate beneficial ownership information will be collected when company is incorporated. Accurate understanding of the customer’s identity is essential for transparent financial transactions. KYC, AML obligations are equally applied to corporate customers to guarantee transparency and trust in business relationship.

Austin Mitchell Lewis

Author Austin Mitchell Lewis

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