Guidance on Beneficial Ownership of Legal Persons

The FATF published it Guidance on Beneficial Ownership of Legal Persons, specifying Recommendation 24 of the FATF Recommendations.
As a reminder, at the March 2022 Plenary, the FATF adopted amendments to Recommendation 24, and agreed to immediately start the work to update guidance on beneficial ownership, with a view to help support the implementation of the new requirements.
The FATF’s revised Recommendation 24 requires countries to ensure that competent authorities have access to adequate, accurate, and up-to-date information on the true owners of companies. The aim is to prevent the misuse of legal entities for criminal purposes and ensure transparency of beneficial ownership.
The updated guidance aims to help countries identify, design, and implement appropriate measures to meet the revised Recommendation 24. The guidance explains the types and sources of relevant information, and the mechanisms and sources to obtain such information.
One of the key aspects of the guidance is the multi-pronged approach, which combines information from various sources, including companies themselves, public authorities in a registry, or alternative mechanisms that enable efficient access to beneficial ownership information. The FATF’s mutual evaluations have shown that countries using a multi-pronged approach are more effective in preventing the misuse of legal persons for criminal purposes and ensuring transparency of beneficial ownership than those using a single approach.
The guidance also helps countries assess and mitigate the money laundering and terrorist financing risks associated with foreign companies to which their countries are exposed.
The updated guidance is the result of several months of consultations with external stakeholders and the private sector. It aims to assist policymakers and practitioners in national authorities and private sector stakeholders in implementing the necessary measures so that shell companies can no longer be a safe haven for illicit proceeds with links to crime or terrorism.