On October 26, following the results of the plenary meeting, the FATF published the proposed revised version of Recommendation 24 on transparency and beneficial ownership of legal entities. The changes will require countries to establish a mandatory beneficial ownership register or an alternative system that would also allow competent authorities to have access to “accurate, adequate and up-to-date” beneficial ownership information.
Also, the draft revised Recommendation advises countries to establish public registries of beneficial ownership. Countries will be allowed to decide which form of registry or alternative mechanism they will use to provide access to information to competent authorities. The method chosen should provide the authorities with prompt and effective access to adequate, accurate and up-to-date information, and the government, in turn, should empower the agency responsible for responding to all international inquiries. Countries should also use any additional measures necessary to ensure that the beneficiaries of companies can be identified, such as information held by regulators or stock exchanges, or obtained by financial institutions (FI) or certain non-financial businesses and professions (DNFBP).
The FATF also proposes that bearer shares and related orders should be subject to additional controls without inadvertently applying excessive controls to the traceable and legitimate use of such instruments.
The proposals would require countries to assess the money laundering risks associated with overseas legal entities that have “close ties” to their country and take appropriate steps to manage and mitigate those risks. The FATF also proposes a risk-based approach to verification of beneficial ownership information.
