How to unravel complex corporate structures and unveil the truth behind international entities

complex corporate structures

In the highly regulated UK lending industry, the ability to understand and unravel complex corporate structures is crucial. Compliance teams are often tasked with the monumental job of ensuring that they fully understand the ownership and control structure of their corporate clients but the task is fraught with challenges, especially when dealing with international entities that may employ sophisticated, multi-layered, and often opaque corporate structures.

Complex corporate structures can involve numerous layers of subsidiaries and parent companies, sometimes spread across various jurisdictions. Sometimes, these structures can be intentionally designed to obscure the true beneficial owners (UBOs) and the real nature of business activities where bad actors are involved or nefarious activities are taking place. 

The stakes are high, as failing to accurately identify and verify these entities can lead to regulatory breaches, financial penalties, and significant reputational damage.

Complex, international, and offshore structures are difficult to manage

The globalisation of business has made it increasingly common for companies to operate through complex networks of international and offshore entities. These structures are not inherently illegal or unethical; they can be used for legitimate purposes such as tax optimisation, risk management, and legal protection. 

However, they can also be misused for illicit activities such as money laundering, tax evasion, and financing terrorism. 

For compliance teams, managing these complex structures is a significant challenge. Each additional layer of ownership and each additional jurisdiction can exponentially increase the complexity of due diligence processes. Some international jurisdictions, in particular, often have less stringent disclosure requirements, making it difficult to obtain reliable and complete information about corporate entities and their UBOs.

Unravelling corporate structures is time-consuming

The process of unravelling these structures and verifying the information is labour-intensive and time-consuming. Compliance teams must sift through vast amounts of data, often scattered across multiple sources and jurisdictions, to piece together an accurate picture of the corporate entity in question. This not only diverts resources away from other critical compliance tasks but also puts significant strain on the team’s time and energy. 

In many cases, the information available is limited, incomplete, or outdated. In turn, this requires countless repeated follow-ups and verifications, further extending the time required to complete due diligence and frustrating the customer. The complexity and resource intensity of this process can be a significant burden on compliance teams, especially in smaller firms with limited resources.

How NorthRow can help

Unravelling complex corporate structures and unveiling the truth behind international entities is a significant challenge for compliance teams in the lending industry. However, with the right tools and resources, compliance teams can effectively manage these challenges and ensure that their firm’s remain compliant with regulatory requirements.

NorthRow’s WorkStation is designed to provide compliance teams with the tools and resources they need to efficiently and effectively manage complex corporate structures, streamlining due diligence processes and reducing the burden of managing complex corporate structures.

Truly global data coverage

To tackle the issue of limited, incomplete, or unavailable information, we have partnered with over 20 tier 1 data providers that feed directly into our intuitive compliance case management solution without the need for multiple systems, log ins and contracts. These partnerships give you access to a vast array of data sources, covering jurisdictions across the globe. 

Our data providers include some of the world’s most reputable and reliable sources, ensuring that the information we provide is accurate and always up-to-date. This global coverage is crucial for identifying and verifying entities that operate across multiple jurisdictions. 

By aggregating data from a wide range of sources, we can provide a comprehensive view of corporate structures, regardless of their complexity or location. This enables compliance teams to access the information they need quickly and efficiently, reducing the time and effort required for due diligence.

Corporate relationships at a glance

One of the key challenges in managing complex corporate structures is understanding the relationships between different entities. With WorkStation, you’ll have clear and intuitive explanations of corporate structures that map out subsidiaries, parent companies, and UBOs, making it easy to see how different entities are connected and simplifying the process of unravelling complex corporate structures. 

By presenting information in a clear and accessible format, WorkStation enables compliance teams to quickly understand the ownership and control structure of their corporate clients. This not only speeds up the due diligence process but also reduces the risk of errors and oversight.

Identify and verify UBOs in seconds

Identifying and verifying UBOs is one of the most critical aspects of due diligence for compliance teams. To streamline this process, we provide tools that allow you to identify and verify individual UBOs at the click of a button. Our platform integrates data from multiple sources along with an intuitive ID&V tool, ensuring that you have access to the most comprehensive and accurate information available to vet and verify UBOs in seconds. This functionality is particularly valuable for dealing with international and offshore entities, where information about UBOs can be difficult to obtain. 

Together with our extensive data sources and advanced technology, we can provide real-time verification of UBOs, giving compliance teams the confidence that they always have accurate and up-to-date information to make informed onboarding decisions.

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