Identifying and Screening Ultimate Beneficiary Owners

Forensic & Litigation Consulting | Global Risk & Investigations Practice (GRIP)

February 27, 2018

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The importance of knowing your business environment is closely tied to understanding the concept of beneficiary and ultimate beneficiary ownership: third parties may be controlled by individuals with conflicting interests to yours.

In November 2017, the International Consortium of Investigative Journalists (ICIJ) released a series of articles branded “the Paradise Papers” based on information contained in 13.4 million reportedly hacked confidential financial and legal documents which were created by Appleby, an offshore legal service provider.

Massive information leaks are no new phenomenon. Nor is the fact that famous public figures and companies may have set up offshore corporate structures.

The Paradise Papers stirred controversy because they brought to light ties between U.S. companies or political figures and Russian interests in a time where Russia is increasingly subjected to political and economic sanctions. For instance, the Paradise Papers purport to establish ties between a company co-owned by Vladimir Putin’s son-in-law and the current U.S. commerce secretary Wilbur Ross. Another example is the alleged links between Russian State-owned entities and early Twitter or Facebook investors.

Indeed, the ICIJ reconstructed the intricate investment schemes set up by two Russian-owned companies with alleged ties to the Russian government and State intelligence agency in order to fund substantial stakes in Twitter and Facebook in 2011. Although these investments were sold off in 2014 well before Donald Trump’s presidential bid announcement in June 2015, both Facebook and Twitter have now been drawn into investigations regarding the role they played in the outcome of the 2016 U.S. presidential election. In light of the current international political context, these purported revelations have created significant public controversy.


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