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Finland Strengthens Beneficial Ownership Transparency to Tackle Financial Crime
A Step Towards a Safer and More Transparent Financial System
In an effort to curb financial crime, corruption, and tax evasion, Finland has strengthened its beneficial ownership transparency rules in line with international standards. The country’s Financial Action Task Force (FATF) agreed on tougher global beneficial ownership rules in March 2022 to prevent criminals from hiding their illicit activities behind secret corporate structures.
Closing Loopholes and Enhancing Transparency
The updated regulations will close loopholes that have allowed fake companies to be used as a cover for criminal activity or to hide wealth from tax authorities. Investigators will now be able to quickly and easily identify the true ‘beneficial’ owners of companies, making it more difficult for criminals to launder money and engage in other financial crimes.
Aligning with International Standards
The FATF has also agreed on enhancements to Recommendation 25 on legal arrangements to bring its requirements in line with those for Recommendation 24 on legal persons. This will ensure a balanced and coherent set of FATF standards on beneficial ownership.
Key Enhancements:
- Closing loopholes that have allowed fake companies to be used as a cover for criminal activity or to hide wealth from tax authorities
- Improving the ability of investigators to identify the true ‘beneficial’ owners of companies
- Enhancing transparency and accountability in the financial system
Supporting Implementation through Risk-Based Guidance
To support the implementation of these new rules, the FATF has updated its risk-based guidance for Recommendation 25. The guidance complements existing guidance on Recommendation 24 and aims to help stakeholders from the public and private sectors assess and mitigate money laundering and terrorist financing risks associated with trusts and other legal arrangements.
The Importance of Beneficial Ownership Transparency:
- Preventing and combating financial crime, corruption, and tax evasion
- Supporting sustainable economic growth
- Creating a safer and more transparent financial system for all
By strengthening its beneficial ownership transparency rules, Finland is taking an important step towards improving its anti-money laundering and combating the financing of terrorism (AML/CFT) framework. This commitment to implementing international standards on beneficial ownership will help to create a safer and more transparent financial system for all.