Detecting connections to money laundering, bribery, and corruption is a daunting task for law firms. The challenge lies in identifying the ultimate beneficial owners of entities, properties, and third-party business partners, as complex ownership trails often cross legal and geographical boundaries. Criminal elements use these methods to conceal their true identities and ultimately benefit from financial transactions.
The OECD’s 2022 report, which analyzed over 400 bribery cases across 41 countries, revealed that one in four cases involved illicit money channeled through secret companies. In addition, the World Bank estimated that corrupt politicians used secret companies to hide their identities in 70% of over 200 grand corruption cases. The New York Times reported that approximately 8% of the world’s personal financial wealth, valued at over US$7 trillion, is held in undeclared offshore deposits.
Two of the most high-profile corruption scandals in recent years – alleged bribery among representatives of FIFA and allegations of political kickbacks involving Petrobras – demonstrate the use of complex networks of companies to hide the details of ultimate beneficiaries. The 2016 leak of 11.5 million files from the database of Panama-based law firm Mossack Fonseca further highlighted the challenges faced by solicitors firms.
While measures have been taken against hidden beneficial ownership in various jurisdictions, the extent of the problem underscores the importance of consistent global action.
Verify 365 can assist your practice with implementing the right AML technology to address the issues. Our team of AML compliance experts can help you protect your practice from the potential implications of not knowing the true identities of those with whom you do business.
At Verify 365, we understand the importance of knowing your customers’ beneficial ownership. Our cutting-edge technology simplifies the process of identifying ultimate beneficiaries, making it easier for lawyers to conduct due diligence.
With our fraud prevention platform, you can quickly and easily verify the identity of your clients and mitigate the risk of conducting business with illicit actors.
By working together and implementing consistent measures, we can combat the challenges posed by complex ownership trails and hidden beneficial ownership.
At Verify 365, we are committed to providing the technology, advice, tools, and resources needed to promote transparency and prevent financial crimes.
Contact us for more information.