Beneficial Ownership

FATF’s strengthened benefiicial ownership standards and guidance in this area will help identify the corrupt, sanctions evaders, money launderers and tax evaders who hide or launder their criminal property or activities in shell companies or other complex structures as well as trusts or other legal arrangements. The FATF extensively engaged with the private sector and other stakeholders on this initiative. This comprehensive body of work aims to improve transparency of beneficial ownership globally.  

Beneficial Ownership of Legal Persons (Recommendation 24)

In March 2022, the FATF agreed on tougher global beneficial ownership rules to stop criminals from hiding their illicit activities and dirty money behind secret corporate structures.

These will close loopholes and regulatory weaknesses that – for too long - have allowed fake companies be used as a cover for criminal activity or to hide wealth from tax authorities.

They will ensure that investigators can quickly and easily find out who the true ‘beneficial’ owners of companies are. The changes will help prevent and combat financial crime, curb corruption and tax evasion and support sustainable economic growth.  

 

Public Statement on revisions to R.24

The revisions to Recommendation 24 will require countries to follow a risk-based approach and consider the risks of legal persons in their countries. The adopted changes to Recommendation 24 will significantly strengthen the global response to tackling concealment of beneficial ownership of legal persons.
Read more The FATF Recommendations

In February 2023, the FATF agreed a guidance document which will help countries implement the revised requirements of Recommendation 24. This also includes assessing and mitigating the money laundering and terrorist financing risks associated with foreign companies to which their countries are exposed. This guidance is the result of several months of intense consultation with external stakeholders and the private sector to ensure that the guidance is clear and addresses the questions that stakeholders in the public and private sectors may have. The guidance aims to facilitate the implementation of the necessary measures so that shell companies can no longer be a safe haven for illicit proceeds with links to crime or terrorism. 

Guidance on Beneficial Ownership of Legal Persons

The FATF guidance will help countries implement the revised Recommendation 24 which require countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies.

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Guidance on Beneficial Ownership of Legal Persons

Webinar: Beneficial Ownership Transparency of Legal Persons

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The FATF organised a webinar which focused on the changes to Recommendation 24 on beneficial ownership of legal persons, which aims to help stop criminals from hiding their illicit activities and dirty money behind secret company structures.  The webinar brought together a panel of experts with a global and domestic focus on enhancing beneficial ownership transparency who helped shape the FATF work in this area. The discussions focused on the following topics:

  • New FATF obligations on beneficial ownership (BO) transparency - objectives and rationale;
  • National experiences, challenges, and lessons-learnt in conducting collecting BO information and developing appropriate mitigation strategies; and
  • Role of private sector – what can be done further to enhance adequacy, accuracy and timeliness of BO information
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Beneficial Ownership of Legal Arrangements (Recommendation 25)

In February 2023, the FATF also agreed on enhancements to Recommendation 25 on legal arrangements to bring its requirements broadly in line with those for Recommendation 24 on legal persons to ensure a balanced and coherent set of FATF standards on beneficial ownership.  In doing so, the FATF sought input from relevant stakeholders, including through a White Paper consultation and a public consultation on proposed changes.

Following the February 2023 revisions to FATF Recommendation 25 on Beneficial ownership and transparency of legal arrangements, the FATF has updated its risk-based guidance for this Recommendation. The guidance complements the existing guidance on Recommendation 24 on legal persons and aims to help stakeholders from the public and private sectors that are involved in trusts or similar legal arrangements to assess and mitigate money laundering and terrorist financing risks. The finalised guidance reflects input from public consultations.  

Guidance on Beneficial Ownership and Transparency of Legal Arrangements

11 Mar 2024

In March 2023, the FATF strengthened its R.24 and R.25 on beneficial ownership with the publication of updated Guidance to assist the implementation of the R.24 requirements. The FATF Standards on transparency and beneficial ownership of legal arrangements – R.25 – require countries to assess the ML/TF risks linked to legal arrangements and take mitigating measures.
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