The Financial Action Task Force (FATF) has published its updated guidance paper outlining tougher global beneficial ownership rules aimed at preventing criminals from hiding their illicit activities and money behind secret corporate structures.

Beneficial Ownership of Legal Persons (Recommendation 24) aims to close loopholes and regulatory weaknesses that, in the FATF’s view, have for too long allowed fake companies be used as a cover for criminal activity or to hide wealth from tax authorities.

Risk assessment and mitigation

The rules set out to enable investigators to quickly and easily find out who the true ‘beneficial’ owners of companies are. The changes aim to help prevent and combat financial crime, curb corruption and tax evasion and support sustainable economic growth.

The updated guidance now includes assessing and mitigating the money laundering and terrorist financing risks associated with foreign companies to which countries are exposed.

Intense consultation

The FATF says the guidance is the result of several months of intense consultation with external stakeholders and the private sector to ensure that the guidance is clear and addresses the questions that stakeholders in the public and private sectors may have.

Essentially, it aims to facilitate the implementation of the necessary measures so that shell companies can no longer be a safe haven for illicit proceeds with links to crime or terrorism.

The FATF’s Guidance to Beneficial Ownership of Legal Persons (Recommendation 24) can be downloaded from here.

Categories: Trade Based Financial crimes News