We are pleased to announce that we have added China to our network of corporate registry connections, as the need for reliable Know-Your-Customer (KYC) solutions continuing to grow at a time of increasingly stringent anti-money laundering (AML) regulations and enforcement.
Over the past year there has been significant new demand from Kyckr’s customers globally for accurate and legally authoritative Chinese company information. Kyckr’s customers can now access comprehensive Chinese company profiles via the Kyckr Registry Portal and the Kyckr API. This includes registration information, capital structure and details of Directors and Shareholders, all sourced from the central Chinese commercial registry.
Increased Chinese economic expansion
In April 2020, China abolished the ownership restrictions for foreign investors in its financial sector, a year earlier than was previously planned. The move is likely to further open up China’s financial system to outside investment.
A key part of China’s “Made in China 2025” strategy is to invest in state-of-the-art Western firms. At a time of increased Chinese economic expansion, it’s clear that ownership of western firms by Chinese entities is only set to increase. In 2019 alone, Chinese companies invested 11.7 billion Euros in EU countries, with the majority of it going towards mergers and acquisitions of existing EU entities, while Chinese financial interests have acquired more than $120 billion of assets in the U.S. economy since 2002.
Over the past decade China has also poured more than $150 billion into Australia by investing in or acquiring Australian companies, according to KPMG analysis. China is also the largest foreign owner of Australian water and the second largest foreign owner of land in Australia.
Customer Due Diligence Requirements on UBOs
Under the EU’s 5th Anti-Money Laundering Directive, European regulated firms must perform due diligence on the Ultimate Beneficial Owners of all new customers. Same applies to Australian entities under AUSTRAC regulations and US companies under FinCen CDD rules. The lack of public information has previously made verifying ultimate beneficial ownership and shareholding in Chinese-owned entities difficult and time-consuming, however with our new registry-sourced data, Kyckr makes this process simple at a time of increased Chinese company ownership.
Regulators levied $706 million in fines for anti-money laundering violations globally in the first half of 2020 compared to a total $444 million in such fines for all of 2019. This highlights the importance of having the right RegTech technology to avoid regulatory risk and reputational damage and leave insufficient due diligence on new clients, improper management of AML measures, poor transaction monitoring and a failure to ensure adherence to the rules in the past.
To heighten the stakes, the FinCEN file leaks last week revealed that banks around the world, including high profile HSBC and JP Morgan, had been involved in US$2 trillion worth of suspicious fraud transfers over the last two decades. The investigations also revealed that US$4.4 billion of suspicious funds were transferred in and out of banks based in Singapore.
Kyckr’s CEO, Ian Henderson, commented “The recent investigations into top banks highlight the need for Know-Your-Customer solutions to prevent money laundering. At Kyckr we are on a mission to increase the amount of data and data sources available to our customers, so they can easily establish who their customers are and stop money laundering at its root.”
“Adding China to our data registry network comes at a pivotal time. In our conversations with customers, China always comes up as one of the most difficult countries to verify company information in a fast and accurate way. The data we can now provide will go a long way to simplifying the process of onboarding for both Chinese-domiciled and Chinese-owned firms and meets Kyckr’s high standards for currency, accuracy and legal authority.”
The addition of Kyckr’s Portal and API is part of a wider programme of product development designed to increase the amount of data and data sources that Kyckr makes available to its customers, at a time of increasingly stringent AML regulations and enforcement.