Short recommendation of the The beneficial ownership of legal persons by FATF

Introduction:

The beneficial ownership of legal persons is a crucial aspect of financial transparency, as it helps to prevent money laundering and terrorist financing. Beneficial ownership refers to the individuals or entities that ultimately own or control a legal person or arrangement, regardless of whether they are listed as legal owners or controllers. To promote transparency of beneficial ownership, the Financial Action Task Force (FATF) has issued guidance to its member countries.

The FATF is an intergovernmental organization that develops and promotes policies to combat money laundering and terrorist financing. Its recommendations provide guidance to countries on how to promote transparency of beneficial ownership, which can help to prevent illicit financial activities.

The first step in promoting transparency of beneficial ownership is to identify the beneficial owners of legal persons. The FATF recommends that countries should require legal persons to obtain and hold adequate, accurate, and up-to-date information on their beneficial ownership. This information should include the name, address, and other identifying information of the beneficial owners.

Countries should also ensure that this information is available to competent authorities without delay. To ensure the effectiveness of measures to combat money laundering and terrorist financing, competent authorities, financial institutions, and other obligated entities should have timely access to accurate and up-to-date information on the beneficial ownership of legal persons. Countries should also have mechanisms in place to verify the accuracy of this information.

The FATF also recommends that countries adopt a risk-based approach to the transparency of beneficial ownership. This means that countries should focus their efforts on high-risk legal persons, such as those in sectors that are more vulnerable to money laundering and terrorist financing. Countries should also ensure that their measures are proportionate to the risks they identify.

International cooperation is essential to combat money laundering and terrorist financing. Countries should exchange information on beneficial ownership and cooperate in investigations related to money laundering and terrorist financing. The FATF provides a platform for international cooperation and encourages its member countries to cooperate with each other.

In conclusion, the transparency of beneficial ownership of legal persons is an important aspect of the fight against money laundering and terrorist financing. The FATF recommendations provide guidance to countries on how to promote transparency of beneficial ownership. By implementing these recommendations, countries can ensure that they have accurate and up-to-date information on the beneficial ownership of legal persons, which can help to prevent money laundering and terrorist financing.

Guidance:

Identification of Beneficial Owners:
The first step in promoting transparency of beneficial ownership is to identify the beneficial owners of legal persons. The FATF recommends that countries should require legal persons to obtain and hold adequate, accurate, and up-to-date information on their beneficial ownership. Countries should also ensure that this information is available to competent authorities without delay.

Access to Information:
To ensure the effectiveness of measures to combat money laundering and terrorist financing, competent authorities, financial institutions, and other obligated entities should have timely access to accurate and up-to-date information on the beneficial ownership of legal persons. Countries should also have mechanisms in place to verify the accuracy of this information.

Risk-Based Approach:
Countries should adopt a risk-based approach to the transparency of beneficial ownership. This means that countries should focus their efforts on high-risk legal persons, such as those in sectors that are more vulnerable to money laundering and terrorist financing. Countries should also ensure that their measures are proportionate to the risks they identify.

International Cooperation:
International cooperation is essential to combat money laundering and terrorist financing. Countries should exchange information on beneficial ownership and cooperate in investigations related to money laundering and terrorist financing. The FATF provides a platform for international cooperation and encourages its member countries to cooperate with each other.

Conclusion:

The transparency of beneficial ownership of legal persons is an important aspect of the fight against money laundering and terrorist financing. The FATF recommendations provide guidance to countries on how to promote transparency of beneficial ownership. By implementing these recommendations, countries can ensure that they have accurate and up-to-date information on the beneficial ownership of legal persons, which can help to prevent money laundering and terrorist financing.

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