Why is it important?
Over the past few years, the importance of CDD has been increasingly emphasised. The key issue here is: How honest are organisations really? During the economic crisis, the trust in financial institutions was damaged considerably. In an increasingly number of industries awareness is growing that an honest business practice is indispensable to win the trust of customers, companies and authorities. In addition, LeasePlan has a banking licence. Therefore, LeasePlan must abide by certain rules.
What is the legal framework?
In order to advance the integrity of the financial sector, there are international rules with which LeasePlan must comply. The rules are incorporated in legislation and De Nederlandsche Bank (DNB - the Dutch central bank) exercises supervision. First, these rules applied mostly to banks, but now they apply to a wider range of institutions. LeasePlan is legally obligated to conduct a ‘counterparty check’.
In the Netherlands, the CDD obligations have been incorporated in:
- the Financial Supervision Act (Wft - Wet op het financieel toezicht);
- the Sanctions Act 1997 and;
- the Money Laundering and Terrorist Financing (Prevention) Act (Wwft - Wet ter voorkoming van witwassen en financieren van terrorisme).
Who or what are UBOs?
UBO is the abbreviation of ‘Ultimate Beneficial Owner(s). UBOs are the people who are the ultimate owner or who have control over your organisation. For example, they are people with more than 25% of the shares or people who have an economic interest of more than 25%. A UBO is always a natural person, never a company. There is also the possibility that there is no UBO. If there is no UBO, then you should provide the pseudo-UBO.
How do our contacts become aware that we are conducting a UBO check?
Ideally, our contacts are not aware of the UBO check. We use public sources to ascertain the correct information of the UBOs and directors. Unfortunately, not all relationships can be found in public sources and then we have no other option than to contact you to comply with our obligation. We do this by letter and a UBO registration form. We send these by e-mail. Your organisation fills in if there is a UBO and, subsequently, who that is (or they are) in the organisation. When there is a UBO, LeasePlan will have to investigate the UBO register. LeasePlan registers the information and checks whether one of these persons appears on international sanctions lists.
What happens if a UBO or director is on a sanctions list or has been connected to money laundering or financing terrorism?
Then, LeasePlan is prohibited from conducting business with that person.
How to determine the free float percentage of a listed company?
You can check this on the site markets.ft.com. You can also google on the company name and the words ‘free float’ to get to the markets.ft.com website directly. The free float of a company is the portion of its shares that can be publicly traded.
Let’s take the example of the company below on the stock exchange. You’ll see that the number of ‘shares outstanding’ is 8,09 bn and the number of ‘free float’ is 8,05 bn. So the free float percentage is more than 99,5% (>75%) of the company (free float / shares outstanding).
What is the UBO register and when does the 'duty of feedback' apply?
As of 27 September 2020, new legislation obliges many organisations to inform the Chamber of Commerce of UBOs. When we perform our 'counterparty search', LeasePlan is obliged:
1)To consult the UBO register when we enter into a new business relationship
2)To determine that the UBOs of the counterparty are registered
3)When they are, to save an extract of the listing in the UBO register
When there is a discrepancy between the registered information in the UBO register and the UBO information in our possession, we are obliged to report this to the Chamber of Commerce and to you. When UBO information has not been registered yet, our duty of feedback does not apply.
Who can I contact if I have any questions?
Your account manager will provide you with further information