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FATF publishes "tougher" beneficial ownership criteria to tighten shell company dirty money carousel

FATF issued "tougher" worldwide beneficial ownership guidelines today to aid countries and financial institutions in preventing shell corporations from serving as safe havens for illicit revenues.

Recommendation 24 of the task force encourages countries to guarantee that competent authorities have access to appropriate, accurate, and up-to-date information on the genuine owners of businesses.


The Paris-based organisation has also updated the guidelines that would assist countries in implementing the amended Guideline 24.


The guidance covers the many types and sources of relevant information, as well as the mechanisms and sources for obtaining such information.


This comprises a multi-pronged method that combines information from firms, public bodies, and other sources in a registry or other mechanism provided it enables timely and efficient access to beneficial ownership information.



FATF mutual evaluations revealed that nations utilising a multi-pronged approach were more effective than countries using a single approach in avoiding the exploitation of legal persons for criminal purposes and ensuring transparency of beneficial ownership.


“The revisions to the Standard will help prevent the organised criminal gangs, the corrupt and sanctions evaders from using anonymous shell companies and other businesses to hide their dirty money and illicit activities,” the group said.


The guidance is intended to assist countries in identifying, designing, and implementing appropriate measures in accordance with the revised Recommendation 24 to ensure that beneficial ownership information is held by a public authority or body acting as a beneficial ownership registry, or another mechanism that allows efficient access to the information.


“The guidance will also help countries assess and mitigate the money laundering and terrorist financing risks associated with foreign companies to which their countries are exposed,” said FATF.


According to the agency, this guideline is the outcome of months of intensive consultation with external parties and the commercial sector.

By fLEXI tEAM


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