Institutional Onboarding

In the same way identification procedures are performed on individuals, an Institutional Onboarding solution is usually aimed at ensuring businesses do not present risks related to money laundering, terrorism financing, and related crimes.

As explained by FATF in Recommendation 10 of FATF Recommendations, one of the CDD applicable measures is to identify the corresponding Beneficial Owner(s), while for legal persons this entails an understanding of the ownership and control structure of the customer:

§10 Customer due diligence (...) The CDD measures to be taken are as follows: (...) (b) Identifying the beneficial owner, and taking reasonable measures to verify the identity of the beneficial owner, such that the financial institution is satisfied that it knows who the beneficial owner is. For legal persons and arrangements this should include financial institutions understanding the ownership and control structure of the customer.

Section 15 of FATF Guidance on Transparency and Beneficial Ownership discusses the definition of Beneficial Owner in the context of legal persons:

§ 15 (...) In other words, the FATF definition focuses on the natural (not legal) persons who actually own and take advantage of capital or assets of the legal person; as well as on those who really exert effective control over it (whether or not they occupy formal positions within that legal person), rather than just the (natural or legal) persons who are legally (on paper) entitled to do so. For example, if a company is legally owned by a second company (according to its corporate registration information), the beneficial owners are actually the natural persons who are behind that second company or ultimate holding company in the chain of ownership and who are controlling it.