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Registers of true owners of anonymous companies on track to become a requirement worldwide

The Financial Action Task Force’s proposed measures for strengthening the global standard a positive development in eliminating corporate secrecy

Transparency International welcomes the proposed amendments to the global standard on company ownership, released yesterday. The draft revisions, put forward by the Financial Action Task Force (FATF) following a three-day plenary, have the potential to significantly strengthen countries’ resistance to dirty money.

Most notably, FATF is finally gearing up to require that all countries set up a beneficial ownership register or use an alternative mechanism with equal efficiency. The encouragement for countries to make the registers public falls short of Transparency International’s expectations but is a welcome development.

There is much room for improvement. The standard should be clear on the benefits of centralised registers. And while it is important that the standard will require that ownership data is verified, specific guidance should clearly state that public authorities should be tasked with verification of the data.

Transparency International first called for the revision of the global standard on beneficial ownership transparency in 2019. Our analysis of FATF’s own country assessments showed that authorities’ reliance on banks and corporate service providers to provide true company ownership information has been hindering corruption and money laundering investigations.

The proposed revisions make it clear that the records kept by banks and other financial institutions cannot be the only or the primary source of information available to authorities. In this regard, the draft amendments are fully aligned with Transparency International’s proposals.

The revisions released this week are open for public consultation and will be considered for adoption in February 2022.

Maíra Martini, Transparency International’s anti-money laundering expert, said:

“We are pleased to see that FATF has stepped up and the growing momentum for greater beneficial ownership transparency has finally caught on. The proposals to include more detailed guidance on the minimum requirements for an effective beneficial ownership transparency regime – despite prior resistance of some member countries – have the game-changing potential.

“The fight against the abuse of anonymous companies is far from over, and the months ahead are crucial for strengthening the future standard – instead of watering it down. We are one big step closer to ending the decades-long abuse of anonymous shell companies.”

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