What’s an opaque structure?

In simple terms, an opaque structure is any legal or organisational arrangement that makes it difficult to identify who ultimately owns or controls a customer, or how decisions are really made. 

Both the Money Laundering Regulations 2017 (as amended) (MLRs) and the National Risk Assessment of Money Laundering and Terrorist Financing 2025 (NRA) treat it as a key risk indicator where ownership or control is difficult to see through clearly.

In practice, opacity arises where legal entities, trusts or arrangements make it hard to identify who really owns or controls assets or decisions. That lack of transparency increases risk because it can hide criminal ownership, sanctions evasion or other illicit influence.

What makes a structure “opaque”?

Based strictly on how the MLRs frame risk, a structure becomes opaque where transparency over ownership or control is reduced. This can include situations where:

• ownership is split across multiple layers of companies or partnerships;
• control is exercised through informal influence rather than shareholding;
• decision-makers are not obvious from constitutional documents;
• nominee arrangements obscure who is really directing the entity; or
• trust or corporate arrangements make it hard to see who ultimately benefits.

The key issue is not whether the structure is lawful but whether it prevents you from clearly identifying the beneficial owner or person exercising control, as required under Regulation 5 and Regulation 28.

How to deal with opaque structures: MLR

The MLRs link opacity directly to higher risk and enhanced due diligence (EDD). Most notably, Regulation 33 requires EDD where a transaction or business relationship involves:

• complex or unusually large transactions;
• unusual patterns of transactions;
• transactions or arrangements with no apparent economic or legal purpose; or
• complex or opaque ownership or control structures.

The level of EDD you apply should be decided using a risk-based approach, and be proportionate to the risk posed by the client or transaction. 

How to deal with opaque structures: Accountancy

Under the Anti-Money Laundering Guidance for the Accountancy Sector (AMLGAS), accountants must assess whether ownership or control structures create uncertainty about who actually owns or controls a client, because this affects risk and due diligence. 

For opaque or layered structures, AMLGAS expects firms to:

• identify and verify beneficial owners (individuals who ultimately own or control the client) as part of client due diligence (CDD), including looking beyond legal ownership to actual economic interest.

• recognise that complex or opaque ownership arrangements are a risk factor, because criminals often try to mask identity or control through those arrangements.

• treat opacity as part of the risk-based approach. That means reflecting unclear ownership/control in your risk assessment outcomes and controls.

• take additional steps where needed to ensure beneficial owners are genuinely identified and verified, such as using independent sources, registries or reliable documentation rather than only what a client provides.

• document all decisions and evidence, so you can explain why a structure was treated as high, medium or low risk and what enhanced checks you applied where necessary.

AMLGAS highlights that effective CDD isn’t just ticking boxes on paperwork: it’s about understanding who really benefits from or controls assets and decisions, particularly where design or structure hides that clarity.

How to deal with opaque structures: Legal

The Legal Sector Affinity Group (LSAG) guidance sets out how law firms should comply with the MLRs. It emphasises clarity around ownership, control and source of funds/wealth as part of good AML practice. 

For structural opacity or complex ownership in a client matter, LSAG expects firms to:

• identify and verify beneficial owners and controllers, not just legal titleholders but anyone with ultimate ownership or significant influence over a client entity, matter or transaction. 

• reflect uncertainty about ownership or control in risk assessments, both at firm-wide level and in individual client or matter risk templates, so you can justify the level of due diligence applied.

• apply customer and matter risk assessments early in the relationship, updating them if new information suggests the structure is more complex or opaque than initially thought. 

• take additional steps where needed beyond basic verification if ownership or control is unclear. For example, checking public registries, intermediary identities or reliable external sources rather than accepting client-provided information on face value. 

• check source of funds and source of wealth where opacity intersects with higher risk, such as funds coming through third parties or from active corporate structures where the beneficial owner isn’t obvious. LSAG embeds these checks within the overall risk-based approach, not as an isolated exercise. 

• document your decisions, including how and why you treated a structure as opaque, what you did to understand it, and how this shaped your risk assessment and due diligence. 

In practice this means moving beyond collecting names and documents to explaining how you reached a view on who ultimately owns or controls a client’s interests, and whether that view is supported by evidence.

How to deal with opaque structures: Property

HMRC supervises estate and letting agency businesses because property transactions are a well-established method for laundering criminal funds, particularly where ownership or control of the buyer is unclear. HMRC guidance consistently highlights opaque ownership structures as a key risk factor in the sector.

Where a property transaction involves opacity, HMRC expects businesses to focus on whether ownership and control can be clearly understood and evidenced. In practice, this means:

• recognising that companies, trusts or overseas entities used to buy or sell property can make it difficult to identify who ultimately owns or controls the transaction.

• treating opacity as a client and transaction risk factor, especially where layered ownership, nominees or corporate buyers are involved.

• identifying and verifying the ultimate beneficial owner, not just the named purchaser or the legal entity appearing on the contract.

• taking additional care where the structure obscures who is providing the funds, who will benefit from the transaction, or who is directing decisions.

• considering whether enhanced due diligence is required where opaque ownership is combined with other risk indicators, such as high-value transactions, overseas buyers, politically exposed person (PEP) exposure or unusual payment arrangements.

• understanding and documenting the source of funds for the transaction, particularly where money is coming from third parties, corporate accounts or jurisdictions outside the UK.

• keeping clear records that explain how ownership and control were assessed, what information was obtained and why the level of due diligence applied was considered proportionate.

HMRC’s guidance is clear that opaque structures are not inherently unlawful. The risk arises where a lack of transparency prevents you from forming a clear view of who ultimately owns or controls the property transaction. Where that clarity cannot be achieved, HMRC expects the risk to be escalated and managed accordingly.

How to deal with opaque structures: HVDs

HMRC also supervises high-value dealers (HVDs) because transactions in high-value goods (like art, vehicles, jewellery and precious metals) are susceptible to abuse where the true owner or payer is hidden behind corporate or intermediary structures.

Under HMRC’s AML framework, opacity matters because it makes it harder to:

• know who is truly buying or selling where companies, nominees or agents are involved;
• verify that the funds are legitimate rather than coming from criminal property being laundered through a high-value sale; and
• link payments to the ultimate beneficial owner, particularly when intermediaries or non-face-to-face arrangements are used.

HMRC guidance for HVDs expects firms to:

• reflect opacity in the risk assessment for each customer and transaction, rating higher risk when the identity of the person with real economic interest or control is unclear.

• apply enhanced due diligence proportionate to risk, including checks on beneficial ownership, source of funds and resolving unclear ownership before completing a transaction.

• check independent lists and registries where relevant, looking beyond what the customer presents to confirm identities and ownership.

• record how conclusions were reached, including how you handled opacity and why you judged a client or transaction as higher or lower risk.

The central theme in HMRC’s supervision of HVDs is that opaque structures and intermediaries increase AML risk, not because they’re illegal, but because they hide the natural persons and financial trails that AML compliance is designed to reveal.

Final thoughts

The MLRs and sector guidance don’t ban complex or layered structures. But they are clear on one point: lack of transparency equals higher risk.

An opaque structure is any arrangement that makes ownership or control unclear. When that happens, the MLRs require you to slow down, dig deeper and apply a level of enhanced due diligence.

Your focus should always be the same question the MLRs are built around: who ultimately owns or controls this client and can you evidence it? If the answer is unclear, the structure is opaque, and your AML response must reflect that risk.