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The misuse of corporate vehicles – a Focus on Beneficial Ownership concealment - Red flags and case studies

03/01/2022

INTELLIGENCE FACTSHEET: STRATEGIC ANALYSIS ON THE MISUSE OF CORPORATE VEHICLES REGISTERED IN MALTA, WITH A FOCUS ON BENEFICIAL OWNERSHIP CONCEALMENT

The Maltese FIAU has recently carried out strategic analysis on the misuse of Maltese-registered companies focusing on beneficial ownership concealment.

The analysis was based on intelligence received during the first seven months of 2021, in which the involvement of at least one Maltese entity was observed. This document provides information extracted from the results of this strategic analysis.

The analysis aims to provide subject persons with ML/FT indicators (or red flags),

The red flags are based on intelligence processed by the FIAU,

  • Which may be of assistance in detecting instances where there are attempts to conceal the actual beneficial owner/s (BO/s) of locally registered companies and
  • Which may potentially have to be reported to the FIAU due to their giving rise to suspicion of ML/FT.

Subject persons are encouraged to ensure beneficial information for their clients is accurate and kept up to date, to enquire when BO discrepancies compared to official registries are observed and to remain vigilant regarding the presence of such red flags in order to consider submitting a report to the FIAU when concealment is suspected.

The indicators to be used in go AML to report these instances should be marked depending on the main reason the possible concealment of ownership is suspected:

  • RS – 15: BO Concealment - Proposed UBO/s changes after requesting identification details (initial BO does not want to be disclosed, persons change when CDD initiated etc.)
  • RS – 33: BO Concealment - UBO disguise by the involvement of third parties (straw men, nominee shareholding not disclosed, signatory rights/power of attorney providing full rights to unrelated persons etc.)
  • RS – 37: BO Concealment - Concealing ownership (decision-making, instructions, correspondence etc.)

In addition to the red flags presented in this document, subject persons are also invited to refer to the FATF – Egmont Group report published in 2018 titled Concealment of Beneficial Ownership [https://www.fatf-gafi.org/publications/methodsandtrends/documents/concealment-beneficial-ownership.html] for more red flags, case studies and other insights on this topic.

https://fiaumalta.org/wp-content/uploads/2021/12/FIAUIntelligence-FactSheet_Misuse-of-companies_BOconcealment-2.pdf

CASE STUDIES