UNCAC Coalition Submission to FATF Consultation on Beneficial Ownership

25 August 2021 –

The UNCAC Coalition prepared a written submission to a recent Financial Action Task Force (FATF) consultation on potential amendments to FATF Recommendation 24 concerning beneficial ownership.

FATF’s recommendations play an important role in advancing real beneficial ownership transparency globally and we welcome the much-needed revision of Recommendation 24.

Recalling that corruption is increasingly transnational in nature and often involves the use of shell companies and other opaque corporate vehicles, our submission calls for all jurisdictions to mandate the public disclosure of ultimate owners of all legal entities in order to avoid safe havens that can be misused for corruption.

In particular, we recommend the following key areas of action:

Key areas of action

The revision of FATF Recommendation 24 should ensure that:

  • information on corporations and other legal entities, including on officers, directors and beneficial owners, is made accessible to the public through free, searchable, public online platforms in order to facilitate access for law enforcement agencies, financial institutions and obliged entities, such as the private sector, civil society, the media, well as the general public;
  • the threshold for beneficial ownership information to be included in a public register is sufficiently low to ensure that persons with relevant ownership or control do not remain hidden. In this regard, governments should consider adopting a risk-based approach, by using lower thresholds for industries, companies, or beneficial owners considered to be high-risk.
  • beneficial ownership information is accessible in an open data format and under an open license that would allow third actors such as CSOs to reuse the information and to link it to other relevant databases within the same jurisdiction or in other countries;
  • beneficial ownership data is searchable by both company name and beneficial owner, as well as other relevant data points;
  • legal entities are legally required to register and submit any subsequent changes in beneficial ownership in a timely manner, with information updated within a short and defined time period after changes occur. The data should be confirmed as correct on at least an annual basis;
  • in cases of non-compliance with the beneficial ownership register, effective, proportionate and dissuasive measures or sanctions are put in place and also imposed in practice;
  • states periodically review the effectiveness of beneficial ownership registries and their measures to ensure the accuracy and completeness of data, in consultation with the various stakeholders involved in beneficial ownership transparency, including CSOs;