Countering fraud, money laundering and terrorist financing have become top priorities for regulators in recent years. Fraudulent parties use off-shore accounts to mask their activity and investigators regularly trace suspicious transactions to fictional addresses, PO boxes, or the private homes of unsuspecting residents.
The Ultimate Beneficial Owner, better known as UBOs Declaration Form, is a new compliance document recently introduced. The requirement for the same became mandatory as a result of Federal Law 20, 2018 which focused on Anti Money Laundering and countering the financing of criminal organizations. As a result, all existing and onboarding companies and organizations must submit the said Form to their relevant regulatory authorities. In this article, we will take a quick look at the Ultimate Beneficial Owner Declaration Form for DMCC companies.
A UBO or Ultimate Beneficial Owner is the person or entity that is the ultimate beneficiary when an institution initiates a transaction. A UBO of a legal entity is a person who:
With an industry-wide clampdown for banks and corporations to know who they do business with, this is why firms or lenders now go through UBO or ‘Ultimate Beneficial Owner’ checks or disclose their UBO identity for any of their business transactions, failure to do so resulting in steep fines.
In the UAE, the government recently replaced a resolution relating to disclosure guidelines for any Ultimate Beneficial Owner, which covers the most updated requirements for entities in UAE to disclose its beneficial owners, intended to enhance transparency of the UAE registered entities.
On the other hand, there are entities which are exempted with this resolution. They are as follows: the companies in financial free zones like Abu Dhabi Gold Markets and Dubai International Financial Centre, and the companies which are directly or indirectly owned by the Federal or Emirate Government. Entities will need to assess who constitutes a UBO.
The UAE Cabinet passed a resolution this year, compulsorily seeking all firms to keep in their main offices registers on partners or shareholders, stating the information about the ownership interests and voting rights held by each individual.
Businesses are also asked to keep similar register on the top shareholder or main investor (25 per cent stake or more) of the company, while providing the relevant reason behind being majority owners of the company and directors, and date since they become one. Similarly, similar registers are to be kept for all other director of the company and nominated members, if any.
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