Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

 
 Transparency and beneficial ownership
Legal persons and arrangements are essential for the conducting of business and are used for a broad variety of purposes. In order to enable the widest use of corporate vehicles, countries establish manifold types of legal entities and arrangements with changing structures. Nevertheless, these complex structures, as provided for by the legislation, might give criminals the possibility to hide their assets, as well as to cover them up for the purposes of entering them into the financial system. In this respect, it is essential to understand the structure of such entities, both in respect of their ownership and control over their activities. Accordingly, the concept of beneficial ownership has been developed, requiring the identification of the ultimate natural person exercising influence over the legal entity.

The FATF Standards include requirements for countries to put in place measures ensuring that legal persons and arrangements will not be misused for ML or TF, in particular by enhancing the transparency of such entities. In order to reflect the diversity of legal persons and arrangements amongst jurisdictions, the measures required by the FATF should apply to all relevant types thereof, including (but not restricted to) companies, foundations, limited liability partnerships, trusts and others.

The measures to be put in place in this respect include registration and public accessibility of basic information about legal persons, timely access to up-to date information on beneficial ownership, as well as measures preventing the misuse of bearer shares and nominee shareholders or directors. In addition, up-to-date information should also be available to competent authorities on a timely basis with regard to legal arrangements. Whereas the requirement of registration of legal persons by state authorities sets concrete obligations for countries, the remaining requirements of the FATF Recommendations merely refer to a desired outcome. Countries may therefore apply a customised approach which suits their legal system best as long as the purpose of the Recommendations is achieved.
 
Reference documents

FATF Guidance 2014 - FATF Guidance: Transparency and Beneficial Ownership
GIFCS 2014 - Standard on the Regulation of Trust and Company Service Providers 
StAR Typologies 2011 - The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It
FATF Typologies 2006 - The Misuse of Corporate Vehicles, including Trust and Company Service Providers