Beneficial Ownership Structuring Scheme – What could be hidden just below that 25% line?

In May 2016 FinCEN released their Final Rule on Beneficial Ownership and Risk-Based Customer Due Diligence. Beneficial Ownership is the “fifth pillar” for anti-money laundering (AML) programs under FinCEN’s rules for banks. Money launderers use transaction structuring to evade triggering of AML related checks, balances and compliance regimes within Financial Institutions. They do this in order to avoid a bank from having to issue a Currency Transaction report. This final rule requires, as part of a know your customer or customer due diligence validation, to report on who owns 25% or more of equity interest in a company. In his post: “Beneficial Ownership Structuring Scheme – What could be hidden just below that 25% line?”, Henri Nkuepo, points out that a new type of structuring may be used to evade triggering a Currency Transaction Report; he calls it “Beneficial Owners structuring”.

Bank of Canada open to more fintech experiments, Wilkins says

You may have missed this piece in the Globe and Mail but it’s important for a couple of reasons. First, the Bank of Canada has publicly stated they are open to more fintech experiments using the Payments Canada Blockchain initiative “Jasper” as one example. The goal of the Jasper is to better understand how the technology could transform the future of payments in Canada. Phase 1 of this project concluded in June 2016. The platform met several of the standards, but gaps existed in the area of the finality of asset ownership – whether assets are legally a financial institution’s with no chance of reversal – operational risk, as well as access and participation requirements.

Growing your business through AML programs

Much has been written about the billions of dollars that will be spent worldwide by organizations seeking to institute sound Anti-Money Laundering (AML) compliance programs. What can get lost in the “cost centre” focus on meeting regulatory demands are the growth opportunities that can be realized as a result of compliance initiatives. Instituting a robust AML program requires establishing consistent systems and processes throughout the organization, allowing multiple lines of business to share a common view of the customer. Know Your Customer (KYC) technology solutions are collecting more robust profiles on applicants instantaneously, enabling customized product offerings during the onboarding process. Looking beyond regulations can help your organization create a competitive advantage out of mandatory business process standardization. Read the full article here.

A Real Estate House of Cards

In a CBC interview, Peter Armstrong interviews Marc Cohodes who has grave concerns regarding the amount of money laundering taking place in the Vancouver and Toronto Real Estate markets. Cohodes says that Vancouver house prices have been inflated primarily by criminal elements. He goes on to say that it’s unwise for policy makers to “let this happen”. Recent policy interventions such as the foreign buyer and vacancy taxes aren’t enough. The government and real estate industry need to enforce laws that stop illicit funds from being used to buy houses. In Canada there are more than 650 organized criminal groups involved in mortgage fraud to launder funds.