Customer Due Diligence: Identifying Shareholders and Beneficial Owners

Overview

To prevent money laundering and terrorism financing, banks must obtain accurate information about their customers. This includes identifying shareholders and beneficial owners of corporate and non-profit organization (NPO) customers.

Requirements for Obtaining Shareholder Registry

(1) Banks should obtain a shareholder’s registry, proof of capital contribution, or other documents that establish equity ownership or capital contribution in the customer corporation or NPO.

These documents will serve as the primary source of information for identifying shareholders and beneficial owners.

Identifying Beneficial Owners of Corporate Customers with Non-Natural Person Shareholders (NNPS)

When a corporate customer has NNPS, banks may use one of the following methods to identify beneficial owners:

• Obtaining Additional Documentation: The bank can obtain the shareholder’s registry, proof of capital contribution, or certificate approved by the bank to determine if there is a natural person holding more than 25% of the shareholding/capital.
• Risk-Based Method with Customer Statement: The bank can adopt a risk-based method that requires customers to provide a statement outlining the company name, registration location, equity structure chart, information on beneficial owners, and reasons for establishing a multi-layer equity structure. Banks should assist customers in constructing this chart and have them confirm the final result.

Identifying Natural-Person Controllers of Corporate Entities or NPOs with No Identifiable Controller

If a customer is a corporate entity or NPO with no identifiable natural-person controller, banks must try to identify the natural persons who exercise control through other methods. If unable to do so, they should inform customers and obtain a statement containing:

• All necessary information for identifying the corporate customer
• An explanation of why no person has more than 25% shareholding interest or capital contribution in the entity/NPO
• Any relevant circumstances