Contexts
Legal
Translation Equivalents
- Ultimate Control
- Person exercising Ultimate Control
- Those in Ultimate Control
- Ultimately Controls
Analysis
Ultimate control in Chinese law refers to having the ability to determine the decisions of an entity, but not necessarily constituting beneficial owner status. Its relevance is particularly crucial to national security law. In American law, this is covered by the CFIUS regulations (see guidance). The international Financial Action Task force refers to this as the “person exercising effective ultimate control,” and further automatically defines any such person as a beneficial owner (see FATF Guidance). The Chinese suffix ren can refer to either a legal entity or a person, however English is specific as to whether it is an individual, unknown group, legal entity, or in the case of CFIUS, the parent corporation.
According to the FATF, “Reference to “ultimately owns or controls” and “ultimate effective control” refer to situations in which ownership/control is exercised through a chain of ownership or by means of control other than direct control.”
Use of this term in legal documents is essential in order to be unambiguous about the legal results that will occur for parties to a financial transaction. See our Article Chinese law for more details.