{"id":1208,"date":"2019-10-28T18:58:38","date_gmt":"2019-10-28T22:58:38","guid":{"rendered":"http:\/\/ielrblog.com\/?p=1208"},"modified":"2019-10-28T18:58:38","modified_gmt":"2019-10-28T22:58:38","slug":"fatf-issues-best-practices-report-on-beneficial-ownership","status":"publish","type":"post","link":"https:\/\/ielrblog.com\/index.php\/2019\/10\/28\/fatf-issues-best-practices-report-on-beneficial-ownership\/","title":{"rendered":"FATF Issues Best Practices Report on Beneficial Ownership"},"content":{"rendered":"

On October 24, 2019, the Financial Action Task Force (FATF) issued a best practice paper,<\/a> seeking to provide suggested solutions, supported by cases and examples of best practices for beneficial ownership from delegations.\u00a0 The paper responded to challenges faced by delegations in implementing FATF Recommendation.\u00a0 The results of FATF Mutual Evaluation Reports (MERs) indicate that jurisdictions find it challenging to achieve a satisfactory level of transparency regarding the beneficial ownership (BO) of legal persons.<\/p>\n

At present FATF is conducting the fourth round of mutual evaluations of the implementation of the FATF standards on anti-money laundering (AML).\u00a0 FATF mutual evaluations show that jurisdictions using a single approach is less effective in making sure that competent authority can obtain accurate and up-to-date BO information to in a timely manner. Instead, a multi-pronged approach using several sources of information is often more effective in preventing the misuse of legal persons for criminal purposes and implementing measures that make the beneficial ownership of legal persons sufficiently transparent. The variety and availability of sources increases transparency and access to information, and helps mitigate accuracy problems with particular sources.<\/p>\n

FATF R.24<\/a> requires countries take measures to prevent the misuse of legal persons for ML\/TF. Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities.<\/p>\n

Through a multi-pronged approach, competent authorities can obtain access to information on beneficial ownership through different sources. They can also ensure the accuracy of information by cross-checking. Key stakeholders, (including companies, directors, shareholders, obliged parties such as FIs and DNFBPs), can more easily identify incorrect beneficial ownership information in their database by reviewing different registers or requesting information from different sources. This will then trigger the obliged party to seek clarifications from the companies, and if necessary, report suspicious activities to competent authorities. Therefore, this approach encourages key stakeholders to fulfil their obligations through peer interaction and supervision.<\/p>\n

As stated in Interpretative Note to R.24, countries should use one or more of mechanisms<\/p>\n