How do you hurt a nation? The world?
Mess up the financial structure.
Global leaders are beginning to become aware of this threat.
With the introduction of AML/CFT regulations, more and more countries are joining the global effort to end the attacks on the financial world.
One way banks are taking steps to prevent financial crime is by seeking the ultimate beneficial owner (UBO) for every business they open an account for.
What are the AML/CFT standards, or a ubo search, and how do they help?
As a global effort, a group of the biggest economies worldwide gathered to discuss financial crime, the impact it has on the economy, and ways to prevent it.
A system of standards and checks — the beginning of the Anti-Money Laundering (AML) and Counter-Finance Terrorism (CFT) standards.
The regulations vary country to country, but most are similar.
As part of the standards, banks and financial institutions collect information to get to know as much as possible about their clients.
When banks do their due diligence for AML/CFT, one of the things they do is do an ubo search.
This is looking for the ultimate beneficial owner.
The UBO is the person who benefits the most from the money and transactions of the business.
They typically have at least 25% shares of stocks or ownership in the company.
By determining the UBO, you can have a good look at the reputation of the person and the business and assess the risks of financial crime from them.
The other information gathered include the business name, financial records, registration information, and all other information to fully know the company and its main people.
AML/CFT standards are mandatory for financial institutions — including fines and punishment for noncompliance.
Doing your part
Protecting yourself and the economy from financial crimes is an important thing for everyone to do.
As an individual or business who is not involved in a financial institution, you can and should still get to know who you are doing business with, especially when exchanging money.
Every person can do their part by asking for a business licence and checking it with the government to verify the information.
Running these checks protects you and your business from being a victim and getting a reputation if a financial crime is committed by your client.
One of the ways that global leaders have determined will help prevent a global financial disaster is through the monitoring of the financial industry.
This led to the introduction of several standards and regulations for financial institutions worldwide.
One of the most important of them is finding the ultimate beneficial owner for every company who opens an account.
The ubo search can determine if the major players in a company are at risk of committing a financial crime, and also verify the legitimacy of the business.
As a citizen, you can help prevent financial crime by verifying the identity of every person and company you exchange money with.
This has to be a global effort to prevent damage to our financial system.
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