Who are the “Beneficiary Owners” according to the Law
Who are the “Beneficiary Owners” according to the Law the beneficiary owner is the natural person who ultimately owns or controls an entity and the person on whose behalf a transaction is conducted. This includes those persons who exercise the ultimate effective control over a legal person. The last effective management is the relationship in which a person:
a) Owns directly or indirectly at least 25 percent of the shares or votes
b) alone owns at least 25% of the votes of the legal person
c) determines de facto the decisions taken by the legal person
d) controls in any way the election, appointment, and removal of the majority of administrators of the legal entity.
The last beneficial owners can be only natural persons; one or more can not be a legal entity. If another company owns one company, the other company’s ownership structure must be clarified until the last beneficial owner is identified, according to the criteria listed above.
Under these conditions, identifying beneficial owners can be a complicated process that applies to domestic and foreign businesses.
The documentation is the same (or more extended, depending on the business and its structure) with the list described above in point 8, according to the business entity’s profile or individual. Based on the FATF recommendations, those entities whose shares are traded on reliable stock exchanges can be exempted from the obligation to identify the ownership structure. However, this exclusionary rule depends on the jurists’ choices in risk assessment and the measures for PPP and FT.
Who are the “Politically Exposed Persons” according to the Law
The definition of PEP includes officials or employees of public administration, senior and middle management levels, important officials of political parties, managers of companies where the state is a shareholder, who must declare their assets according to Law no. 9049, Date 10.4.2003 “On the declaration and control of assets of financial liabilities of elected officials and some public servants”. Persons closely related to them are considered PEP, including family members, persons closely related in personal, work, or business relationships.
PEPs are also foreign individuals who hold senior state positions in their countries of origin, run state-owned companies, international organizations, party leaders, MPs. Foreign PEPs and persons closely related to them in personal, family, or business relationships are considered.
This category of persons is considered politically exposed up to 3 years after leaving office. If businesses have in their structures, shareholders designated as PEP, the company is classified as high risk. Administrators or business representatives need to understand that they will be subject to a higher monitoring regime throughout their relationship with the bank. Banks are obliged to request additional information on the source of funds, the real beneficiaries of insurance policies, the purpose of transactions, prerogative documentation, etc.
Money laundering is a process closely linked to corruption and bribery, and it often becomes challenging to find the dividing line between the two. Individuals designated as PEP are assessed as high risk and kept under monitoring to understand their wealth’s origin if transactions, behavior, and lifestyle are consistent with the declared income. Albania has just started the “vetting” process for PEPs in the judiciary.