Following a white paper on the revision of the rules on the transparency and beneficial ownership (BO) of legal arrangements, the Financial Action Task Force (FATF) published draft amendments to its Recommendation 25 (R.25) and Interpretive Note (INR.25). The FATF may also amend the definition of BO in the glossary to provide more clarity regarding legal arrangements.
The FATF Recommendations set out global AML/CFT measures and should be implemented by countries in the best way possible according to their legal, administrative and operational frameworks. The first batch of FATF Recommendations were published in 1990 and lastly updated in 2012. They are complemented by their Interpretive Notes and a Glossary of definitions.
The FATF Recommendation 25 (R.25) addresses the transparency and beneficial ownership of legal arrangements. Inter alia, R.25 provides advice on measures to prevent the misuse of legal arrangements for ML/TF, and on facilitating the access to beneficial ownership and control information by financial institutions and designated non-financial businesses and professions when meeting certain requirements.
In our response, we highlighted that a definition of “basic ownership” is needed to provide legal certainty on the use of sources when obtaining beneficial ownership information. As a main challenge, we identified the different regulatory frameworks and transparency regimes that hamper the implementation of the rules.
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