Determining the ultimate beneficial owner for entities in the ownership structure

The identification of the ultimate beneficial owner (UBO) in complex ownership structures is challenging, particularly when clients are part of multi-layered entities across different jurisdictions. The legal definition of UBO, established by the AML Act of March 1, 2018, includes general and specific criteria for determining who qualifies as a beneficial owner. Understanding control over an entity is crucial, as it can be direct or indirect, and identifying the UBO involves tracing control to the individuals at the end of the ownership chain. The analysis must be distinct for each entity within the structure, as the status of a UBO is determined based on specific legal and factual circumstances. For example, in a family foundation structure, the UBOs are identified based on their rights and control over the foundation and its subsidiaries, illustrating the complexity of UBO determination in layered ownership scenarios.