What are beneficial owners and acting persons under the GwG?

Under the German Anti-Money Laundering Act (GwG), beneficial owners and acting persons play a central role in combating money laundering and terrorist financing. They must be clearly identified and verified. Here is an explanation of the two terms:

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1. Beneficial owners

A beneficial owner is a natural person who exercises actual control over a company or assets. Specifically, this includes:

• Direct or indirect ownership: A person who holds more than 25% of the shares in a company is considered a beneficial owner.
• Control through influence: A person who exercises controlling influence over business decisions or the company, even without formal ownership, is considered a beneficial owner.
• Trustees or representatives: Persons officially acting as representatives or trustees must be identified to make sure no other beneficial owners are hidden behind them.

Beneficial owners must be identified to ensure that a company's legally designated structure is not used to conceal criminal activities such as money laundering or tax evasion.

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2. Acting persons

Acting persons are those who act on behalf of the company or the beneficial owners and make business decisions. They can be:

• Managing directors or board members: Persons who enter into binding transactions on behalf of the company.
• Authorized representatives or Prokuristen (authorized signatories): These persons often hold formal powers of attorney to act on behalf of the company or the beneficial owner.

Under the GwG, acting persons and beneficial owners must be identified and verified to ensure that all business relationships are transparent and no anonymous structures are used for illegal activities.

By identifying these persons, companies can better assess risks and meet their obligations to combat money laundering and terrorist financing.

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Data to collect for beneficial owners and acting persons

The following data must be collected for beneficial owners and acting persons:

• First and last name: Full name of the beneficial owner.
• Date and place of birth: To ensure the person can be clearly identified.
• Residential address: The person's current address for contact and identity verification.
• Politically exposed person (PEP) declaration: Whether the person is a politically exposed person, since special requirements apply to this group.

Additional optional data:

• Nationality (optional): Determines which country may be relevant for regulatory requirements.
• ID card or passport: A copy of a valid ID document must be presented and verified as part of identity verification (see identity verification procedures) to confirm the person's identity. During onboarding, the system optionally allows an ID document to be uploaded

For the beneficial owner, the following must also be documented

• Nature and extent of beneficial ownership: How the person exercises influence over the company, e.g. whether they hold direct or indirect ownership rights or exercise control in some other way. As a rule, shareholdings of more than 25% are relevant.

For the acting person, the following must also be documented

• Position and role in the company: The person's role in the company, e.g. managing director, board member or Prokurist (authorized signatory), and the type of powers of attorney.
• Power of representation: Whether and to what extent the acting person is authorized to legally represent the company.

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