On August 20, 2021, the FATF completed consultations on amendments to Directive 24 "Transparency and beneficial owners of legal entities".
The amendments will require all countries to assess and mitigate the anti-money laundering risks of certain legal entities established in foreign countries, as well as to improve the application of current anti-money laundering measures to domestic legal entities. The FATF considers this tightening to be necessary due to the use of cross-border company structures to conceal beneficial ownership, but recognizes that there are practical problems in identifying and assessing the risks of legal entities established abroad. Therefore, he is looking for a risk-based approach that limits the scope of the measure to overseas legal entities that have “sufficient” links with countries.
Another amendment proposed by the FATF concerns “multidimensional” approaches to the collection of beneficial ownership information. The FATF is considering what elements should be included in the “multidimensional” approach and what additional measures should be considered based on the experience of countries with beneficial ownership registries. The FATF recognizes that centralized registries are not the only solution and seeks comments on the key advantages and disadvantages of alternative approaches, such as requiring companies, financial institutions and non-financial professionals to retain beneficial ownership information.
In addition, the amendments include the following requirements
- improving the accuracy and timeliness of information
- ensuring easy access to information by the competent authorities and at the same time protecting the confidentiality of data subjects
- introducing stricter controls over the use of bearer shares and nominee directors and shareholders
The text of recommendation R.24 will be reviewed and discussed at the FATF meetings in October 2021.
