To prevent criminals from concealing ownership through complex structures, FICA requires accountable institutions to identify and verify ultimate beneficial owners (UBOs), and the Financial Intelligence Centre (FIC) has lowered the threshold for identifying UBOs.
As a result, UBOs have become one of the most talked-about FICA topics, often raising more questions than answers, says Hawken McEwan, Director of Risk and Compliance at nCino KYC Africa.
He says: “The FIC has strongly recommended that accountable institutions lower the UBO threshold expected for identifying controlling ownership from 25% to 5%, representing a crucial shift in our approach to combating money laundering, corruption and other financial crimes. For years, it was generally understood that a 25% shareholding was sufficient to establish ownership or control of a company. Over time, criminals have become increasingly sophisticated, often using complex webs of smaller shareholdings to obscure their control over legal entities. The 5% threshold is a direct response to these tactics, making it significantly harder for bad actors to hide behind corporate structures.”
This is intended to strengthen the country’s defences against financial crime, move closer to getting off the FATF’s grey list, and to build a financial system that is truly world-class in its integrity and transparency to attract more foreign investment, improve South Africa’s global economic standing and foster a more ethical business environment.
Accountable institutions must take several important steps to identify and verify UBOs, taking this guidance into account. However, for many organisations questions remain, including: How do I determine who qualifies as a UBO? How should UBOs be integrated into my RMCP? And what does the 5% threshold mean for my business?
To answer these questions and more, nCino KYC Africa will host a webinar outlining everything organisations need to know about UBOs. nCino experts will outline what UBOs are, how to find them and what challenges are associated with doing so, along with insights into the beneficial ownership register and how nCino KYC can assist organisations to become FICA compliant. Attendees will also receive a newly created UBO Guide, packed with insights and tips to help them identify UBOs.
Back by popular demand, nCino KYC Africa will once again host its widely attended webinar on 20 August at 10am. Click here to sign up for the free compliance webinar.
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