Who is really behind your counterparty?

A university professor in Milan discovered that his apartment had been sold. The seller was a stranger carrying a forged identity document. A notary and a bank had both processed the sale, and neither had properly verified who they were dealing with.

Cases like this are not rare, and they are not limited to property. They share one root cause: a counterparty that was never properly identified. For professionals and financial institutions, that gap is fast becoming a legal liability as well as a business risk.

A single European rulebook

The EU's new Anti-Money Laundering Regulation (Regulation (EU) 2024/1624) will apply directly in every Member State from 10 July 2027, replacing the patchwork of national rules built on successive directives. It harmonises the definition of beneficial owner at 25% ownership or control, sets clearer rules for layered ownership chains, and requires beneficial ownership data to be verified and kept up to date, not simply collected once. Supervision is being strengthened at the same time through the new EU Anti-Money Laundering Authority (AMLA) in Frankfurt.

The obligations reach well beyond banks. Statutory auditors, accountants, lawyers, members of boards of statutory auditors and insurers all need to know who really controls the entities they work with.

Where identification breaks down

Three patterns stand out:

• Opaque control chains. A joint-stock company controlled by holding entities whose owners are unclear. This is exactly the point where an auditor should be asking who stands behind the structure.
• Short-lived companies. Transport firms that operate for around three years with no vehicles or real assets, report €2 to 3 million in annual turnover, never pay their VAT and then close. When that happens, boards and statutory auditors are asked what they checked.
• Ordinary transactions, unusual origins. Suspicious transaction reports often start from something that looks routine, such as a foreign cheque paid into an account.

Identification is a process, not a moment

Effective counterparty due diligence works on three levels:

• At onboarding: establishing the identity of the counterparty and its ultimate beneficial owners before the relationship begins. This is the role of AMOS, Strongroom's Automated Monitoring & Onboarding System, where every automated match is verified by a dedicated analyst.
• Throughout the relationship: circumstances change after onboarding. With Sentinel, if a director of a company you work with becomes involved in legal proceedings, you are alerted straight away.
• Along the supply chain: for sectors such as gold refining and foundries, knowing who you buy from, and whether your suppliers meet EU requirements, matters as much as knowing your clients.

What this means for professionals

For auditors in particular, the key question is how far checks must go to limit liability and to show that proper vigilance was exercised. The answer lies in identification that is documented, verifiable and continuous, supported by RegTech that catches what manual checks overlook.

We see what others miss.

Join the discussion

We will explore these questions in an online seminar on 24 November 2026, 9:00 to 11:00 CET (in Italian), with Dott. Luigi Maninetti, Avv. Guelfi, Dott. Paolo Brescia and Jean-Louis Jaumin of Strongroom Intelligence. Participation qualifies for CPD credits for statutory auditors. To register, contact info@strongroom-intel.com.