Financial Crime World

Ensuring Transparency in Company Ownership: Guidelines for Preventing Money Laundering and Terrorist Financing

Introduction

The Financial Action Task Force (FATF) recommendations provide a framework for countries to implement effective measures to prevent money laundering and terrorist financing. This document outlines the guidelines for countries to ensure transparency in company ownership, promoting a safer financial system.

Key Requirements for Countries

1. Identify Beneficial Owners

  • Mechanisms must be in place to identify and record the beneficial owners of companies, foundations, trusts, and other legal persons.
  • Accurate and up-to-date information about beneficial ownership must be maintained by companies, financial institutions, and professional intermediaries.

2. Maintain Accurate Information

  • Companies, financial institutions, and professional intermediaries must maintain accurate and up-to-date information about their customers, including beneficial ownership.
  • Competent authorities should have timely access to basic and beneficial ownership information held by company registries, financial institutions, and other relevant parties.

3. Prevent Misuse of Bearer Shares

  • Countries should take measures to prevent the misuse of bearer shares and bearer share warrants.
  • Clear responsibility, liability, and effective sanctions must be established for failure to comply with requirements.
  • Similar requirements should be implemented for foundations, Anstalt, limited liability partnerships, and other types of legal persons.
  • Clear responsibility, liability, and effective sanctions must be established for failure to comply with requirements.

International Cooperation

Countries should facilitate access by foreign competent authorities to basic information held by company registries. They should also exchange information on shareholders and cooperate in obtaining beneficial ownership information on behalf of foreign counterparts.

Conclusion

These guidelines aim to ensure that countries have effective measures in place to prevent money laundering and terrorist financing by promoting transparency in company ownership.