FATF Opens Public Consultation for Recommendation 25 on Beneficial Ownership

November 2, 2023

The FATF (Financial Action Task Force)  invites public feedback on its latest guidelines for Recommendation 25, which focuses on Beneficial Ownership and Transparency of Legal Arrangements.

FATF revised Recommendation 25 at its February 2023 Plenary and embarked on updating the guidance to strengthen the implementation of the newly established requirements.

The watchdog is actively soliciting perspectives from a broad spectrum of entities including businesses, legal entities, financial sectors, specified commercial and professional services, as well as non-profit organizations. It is also seeking insights from various other interested parties and stakeholders.

Specifically, comments on Recommendation 25 are requested on these key topics:

Purposes of express trusts

What additional purposes can express trusts fulfill that aren’t covered in the standard guidance?

Potential scenarios concerning beneficiaries

Should the Guidance consider additional context pertaining to beneficiaries that are currently not included?

Terms to be included in Trust Administration

Are there any other tasks that could be considered as part of the scope of trust administration?

Additional mechanisms to access beneficial ownership information

What other methods are available to obtain information about the beneficial owners in the framework of trusts?

Approaches to identity, access, and mitigate the ML/TF risks

What are the recommended strategies for pinpointing, evaluating, and reducing money laundering and terrorist financing risks associated with various legal structures, including domestically governed trusts, foreign trusts managed within the country, and foreign trusts with significant connections to the country? Are there any discernible patterns?

Non-professional trustee selection & typic trust type

What circumstances lead to the selection of a non-professional trustee, and what kinds of trusts are usually overseen by them?

Obligations on non-professional trustees

What methods can countries employ to more efficiently fulfill their responsibilities regarding non-professional trustees?

About Ultimate Beneficial Ownership

Ultimate beneficial ownership transparency is necessary to prevent financial crimes by ensuring that the true owners of businesses and assets cannot conceal their identities behind layers of complex corporate structure Ultimate Beneficial Ownership in KYC relates to the transparency, accountability & legal compliance of the firm’s ownership in the course of AML regulations.  However, getting to know about ultimate beneficial ownership can be a tricky task due to the complicated ownership structure.

Also read: Challenges and Solutions in Compliance for Ultimate Beneficial Ownership