FINMA’s new point of attention: the web of business relationships
What understanding the structure means
Obligation to identify and document the forms of control by the UBO
Which nature and levels of the control qualify the UBO

Introduction by the chairman of the conference

• Why should a financial intermediary understand the need of use by Beneficial Owner(s) of legal structures or arrangements i.e. Trust, Complex Structures, Corporate Vehicles, and/or Private
  Investment Vehicles (PIV) and the financial mechanism that ties them together?
• From simple “complex structures” to a web of highly complex structures – do we still see and understand something? Is the picture blurred?

Group / “web of business relationships”

The new requirements of FINMA relative to complex structures: understanding the groups / webs of business relationships and assessing the consolidated risk

• Beginnings of use of complex structures
• FINMA definition and key attributes
• FINMA audit points for complex structures
• Understanding the risks in complex structures
• How to respond to the new point of attention raised by FINMA (Risk report 2023) to identify the «a web of business relationships»
• Practical requirements and difficulties in assessingthe group of business relationships as a whole
• Expectation of periodic reviews for identifying and managing complex structured business relationships
• Single client view for identifying and managing risks related to complex structures

Analysing and documenting the structure

Onboarding and monitoring of structures: obligations, methodology, expected documentation,
market practice

• The duty to understand the structures: what does it mean? Understanding the relationships of ownership and control, the purpose of the structure? Is it possible without analyzing the use of the structure, the transactions and the counterparties of these transactions
• What is the difference between ownership and control? Are these concepts the same across the globe?
• What is the purpose of the analysis of the structure and what are the information that you must look for and document: understanding the need for a structure and its use, the history of the structure, identifying its UBOs, relationship management: ownership, versus power and control exercise (shareholders, control by other means)
• Inherent risks ? Solely money laundering? Other financial crime risks and sanctions risks? tax crime?
• How to build, document organizational chart? Why doing it and how ?
• Typical questions that could be raised in the process of discovery
• When evaluating the structure, where does the eye stop? What are the “limits” of the structure?
• Exercises of reading and interpreting an organizational chart
• The issues and the expectations relative to intermediary structures: what documentation of the intermediary structures? Must all levels be documented ?
• Control on the CRS/ FATCA reporting and on the FI status of structures: loophole?

Identifiying and documenting the forms of control and the levels of power

How to perform the obligations to reveal and document the forms of control and the levels of power

• This presentation aims at clarifying the different forms of control, the levels and the nature of these controls as well as the way to document these controls in compliance with the Convention de diligence des banques suisses (CDB).
• The forms of control by other means . Definition of the indirect controls
  . Examples of indirect controls
  . Implications for control holders
• The levels and the nature of the control that qualifies the Ultimate Beneficial Owner/Manager (UBOM)
  . Definition of UBOM
  . Levels of control : direct control, indirect control, ultimate control
  . Nature of the control
• The different control holders
  . Identification of the control holders; rights on the account, role of the settlor, role of the protector
  . Required documentation
• Documentation of the different types of control
  . Types of documents to maintain
  . Controls on the intermediary companies: identification of the intermediary entities, documentation of the controls exercised on these entities, procedures to ensure a continuous surveillance