Why do I need to identify a beneficial owner?
Doing business with non-individual customer types has different risks than doing business with individuals. It is a requirement from AUSTRAC under Part B of and AML/CTF Program for businesses to identify and verify their customers and understand their customers’ financial activities. By knowing its customers, a business should be better able to mitigate risks such as money laundering and terrorist funding. It is crucial for businesses in certain industries to comply with KYC/ AML (anti-money laundering) regulations. Failure to comply can result in fines and other consequences. In order to meet the obligations of compliance, you must:
- Assess the money laundering/terrorism risk posed by the beneficial owners of your customers. It is necessary to review beneficial owner risks regularly.
- Determine the identity of the beneficial owner(s) of your non-individual customers.
- Collect and take reasonable measures to verify each beneficial owner’s identification information such as full name, date of birth and residential address.
- Keep records of the beneficial owner identification processes to comply with Division 3 of Part 10 of the AML CTF Act 2006.
- Document how you will fulfil your obligations in the AML/CTF program.
How to discover a beneficial owner