AUSTRAC Releases New Guidance on Beneficial Ownership

AUSTRAC recently updated its guidance on identifying and verifying beneficial owners, placing a stronger emphasis on "control" rather than just strict shareholding percentages. Read the full AUSTRAC guidance.

Moving Beyond the 25% Rule

Historically, many firms defaulted to identifying individuals who owned 25% or more of a corporate entity. While this remains a crucial threshold, AUSTRAC's new guidance clarifies that beneficial ownership also extends to individuals who exercise effective control over the company or trust, regardless of their equity stake.

Control in Complex Structures

For complex structures, such as discretionary trusts or multi-layered corporate vehicles, identifying control can be difficult. AUSTRAC advises firms to look for:

• Individuals with the power to appoint or remove directors (or trustees).
• Individuals whose ultimate decisions direct the financial or operating policies of the entity.
• Situations where control is exerted through informal means, such as family relationships or shadow directors.