One of our clients recently received a formal request from a supplier, asking them to declare their company’s beneficial ownership; names, birthdates, addresses, nationalities, and share percentages included. It felt unexpected, but the reason behind it is becoming increasingly common: compliance with EU anti-money laundering (AML) regulations. If your business operates in or with the EU, this kind of request may come your way too.
Why Is This Happening?
European regulations are evolving to close transparency gaps in ownership structures. Financial institutions have long been required to verify who ultimately owns or controls the companies they work with. Now, those expectations are extending into the broader economy, including your suppliers and partners.
New rules, including the EU AML reform and the Corporate Sustainability Due Diligence Directive (CSDDD), are pushing companies to go beyond basic Know Your Customer (KYC) checks. Businesses are expected to know their suppliers, and increasingly, their suppliers’ owners.
What Does Your Company Need to Do?
If you receive a request like this, here’s how to handle it effectively:
- Identify your UBOs (Ultimate Beneficial Owners): Under EU law, these are individuals who directly or indirectly own or control 25% or more of your company.
- Draft a formal letter: Use company letterhead and include names, dates of birth, addresses, nationalities, and ownership percentages. It must be signed by an authorized person (e.g. a director).
- Meet the deadline carefully: These requests often come with tight turnarounds. Double-check your records, involve legal or compliance teams if needed, and ensure the accuracy of the information.
- Prepare for repetition: This likely won’t be the last request. Set up internal procedures to track ownership changes and respond quickly in the future.
Important note: not all suppliers or third parties will accept a letter from you stating the UBO’s details. They may require supporting information (extracts Chamber of Commerce, extracts of the UBO register, structure charts, and so on).
Compliance as a Competitive Advantage
Far from being just red tape, transparency builds business resilience. A clear beneficial ownership structure:
- Enhances trust with banks, partners, and clients
- Reduces reputational and legal risk
- Prepares you forany upcoming EU compliance standards
- Signals your business is well-managed and future-ready
We recently helped our client respond to such a request by reviewing their company documents, identifying UBOs, drafting a compliant letter, and advising on how to maintain readiness for future audits. The result: a timely, accurate, and confidence-building response. Find out how we can help you, by contacting us now.