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How to prevent money laudering and terrorist financing?

An important part of the work to prevent money laundering and other unlawful activities is to keep track of who is the beneficial owner of a company. However, this is often both time-consuming and involves a degree of administrative work. UC is therefore launching a new service, UC Beneficial Owner Monitoring, which updates customers automatically when the beneficial owner of a company changes.

At the end of August UC is expanding its Beneficial Owner family with the launch of the service UC Beneficial Owner Monitoring.

– “This service provides customers with automatic updates on beneficial owners. The companies decide which portfolio of customers they want to be updated on and if there is a change in the beneficial ownership, our customers are automatically updated with this information,” says Ola Nielsen, product owner for Risk Decisions at UC, part of Enento Group.

Just like the other two services, UC Beneficial Owner and UC Beneficial Owner Batch, it is the official register of beneficial owners kept by Bolagsverket, the Swedish Companies Registration Office, that is made available. Since 2017 most companies and associations have been required under Swedish law to notify Bolagsverket of their beneficial owner, in accordance with the EU Anti-Money Laundering Directive adopted in 2015. The information concerning the beneficial owner is to help combat money laundering and terrorist financing.

UC’s beneficial owner services fulfil different functions. UC Beneficial Owner is there for those who want to check who the beneficial owner of a specific company is, while UC Beneficial Owner Batch allows multiple companies to be checked in one query to the register. These services provide information on who the beneficial owner is at the present time – for example, providing their name and personal identity number, the percentage of the company that the person controls and the type of control concerned.

But there are also companies that need to be updated more continuously whenever the registered beneficial owner changes.

“UC Beneficial Owner Monitoring is of particular benefit to companies that are subject to the Anti-Money Laundering Directive and that need to be able to show that they have checked who the beneficial owner is, and that their information is up-to-date. However, all companies can benefit from knowing who they are doing business with, particularly from a fraud point of view,” says Ola Nielsen.

Those subject to the Anti-Money Laundering Directive include financial enterprises such as banks and finance companies, as well as non-financial enterprises such as gaming companies, real estate agents and accountancy firms. But keeping tabs on the beneficial owner is of great value to any kind of company, particularly when there are customer relations with other companies. This is because since the Swedish Act on Penalties for Money Laundering Offences was introduced in 2014, reports of money laundering have increased considerably. This is shown by a report from the Swedish National Council for Crime Prevention (Brottsförebyggande rådet, or Brå for short) that was published in December 2019. In 2015 and 2016 around 2,000 money laundering offences were reported per year; in 2018 the figure increased to 7,000 reports per year. The majority of the reports related to fraud, are often a precursor to money laundering offences. The number of prosecutions brought for money laundering offences increased from around 200 to around 1,000 over the period 2015–2017, and in 74 percent of rulings, fraud was a precursor to the money laundering offence.

Ola Nielsen says that a typical credit fraud involves one or more individuals starting up or taking over a limited company and taking out credit with no intention of repaying it. They then either leave the company or place it in bankruptcy.

– “When entering into a new agreement it’s natural to check up on a new customer, but it can also be a good idea to have regular checks on existing customers. This is where UC Beneficial Owner Monitoring provides security for the customer – they know that they have the latest information on who the beneficial owner is, and at the same time we are helping the customer comply with the rules in force,” he concludes.


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