Definition

The Financial Action Task Force (FAFT), that currently comprises 37 member jurisdictions and two regional organisations representing most major financial centres in all parts of the globe, advises that “Beneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement”.

A UBO must always refer to a natural human. A UBO has to be a person and cannot be legal entity, and follows the ownership chain upwards till all persons having the ownership have been identified.

FATF clarifies that “ultimately owns or controls” and “ultimate effective control” refer to situations in which ownership/control is exercised through a chain of ownership or by means of control other than direct control

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