Best Practices on Beneficial Ownership for Legal Persons
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The results of FATF mutual evaluations indicate that jurisdictions find it challenging to achieve a satisfactory level of transparency regarding the beneficial ownership of legal persons. The best practice paper aims to provide solutions, supported by cases and examples of best practices from across countries, in response to challenges in implementing FATF Recommendation 24 on transparency and beneficial ownership of legal persons.
The paper identifies the most common challenges that countries face in ensuring that the beneficial owner(s) of legal persons is identified, and suggests key features of an effective system. It also suggests options for jurisdictions to obtain beneficial ownership information of overseas entities.
The paper highlights that a multi-pronged approach using several sources of information is often more effective than using a single mechanism. This helps in preventing the misuse of legal persons for criminal purposes and implementing measures that make the beneficial ownership of legal persons sufficiently transparent. The variety and availability of sources also increases transparency and access to information, and helps mitigate accuracy problems with particular sources.