FATF consultation on beneficial ownership legislation (‘Recommendation 24’) | AML, CFT

One of the sources of the unworkable beneficial ownership bureaucracy that is harming people in Europe, is FATF, that is drafting legislation without the scrutiny of experts or parliaments. FATF intends to change its legislation in regard of beneficial ownership (Recommendation 24) and is inviting the public to participate in a consultation.

FATFs ultimate beneficial ownership rules
The current text of the ultimate beneficial ownership rules in the FATF legislation is very general:

More details are to be found in something that is called ‘interpretative notes’, in reality they are implementation rules, see these pages from the Recommendations document.

Consultation
FATF on 25 June announced its intention to amend Recommendation 24:

Revisions to Recommendation 24 – White Paper for Public Consultation
25 Jun 2021

The FATF is considering a number of potential changes to Recommendation 24, including the potential for updates in the areas set out below. FATF’s work in this area is ongoing, and will benefit from hearing views from stakeholders, including companies and other legal persons, financial institutions, designated non-financial businesses and professions (DNFBPs), and non-profit organisations. Deadline for comments, 20 August (18h00 CET).

White Paper R.24 Public Consultation (pdf)

On this undated page you find the text in html. In the white paper the FATF admits that the beneficial owners themselves are not considered to be a ‘stakeholder’. Hopefully beneficial owners and their organisations will participate.

The questions asked by FATF in regard of the ‘Multipronged approach to collection of Beneficial Ownership (BO) information‘ are relevant. FATF asks e.g. for the disadvantages of the BO registry and it asks if the compliance burden on low risk companies be reduced without creating loopholes that could be exploited by criminals. The public is invited to respond, the consultation ends 20 August 2021.

In preparing European AML Regulation, the Commission would do well to take the consultation responses into account.

 


Addition 13 August 2021
Comments Ian Ross on LinkedIn on FATF post regarding beneficial ownership:

Creating lists for the sake of creating lists. Out of date in no time. Creating an eternal compliance management process of chasing information and changes to companies ownership structures that is never verified (time? resources?). Companies House, the UK ’s biggest professional enabler may as well not exist; they have allowed thousands to slip through the net with no chance of any investigation (and how much money have those companies laundered via the UK)?
Lists that hide the guilty amongst the innocenent, no metrics of why a company/owner should be deemed as involved in criminal activity (Panama papers style).. compliance inconsistencies in jurisdictions who understand and apply ‘the lists’ differently. So tick-box due diligence and KYC beckons more than ever.

A so-called ‘international standard’ that is flawed from an organisation barking on about transparency that creates poltically-motivated and biased ‘mutual evaluation reports’. But what is of note that this ‘standard’ will likely bring with it punitive measures, ‘on the watch list’ who don’t kow-tow to the FATF.

 


Addition 23 August 2021
The AML-committee (wetgevingsadviescommissie Wwft) of the Dutch Bar (Nederlandse Orde van Advocaten) has answered the FATF-questions regarding R. 24 in this advice.

G20 in a recent communiqué stated that FATF is on the right way, including its activities in regard of revision of R. 24:

We reiterate our support for the Financial Action Task Force (FATF) and the nine FATF-style Regional Bodies (FSRBs). We each commit to making additional contributions, including to the IMF and WB, as needed, to strengthen the FSRBs and the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) frameworks of their membership, in line with the priorities agreed by FATF, and share our commitments with the FATF. We call on other FATF members, the IMF and the WB to similarly increase their financial and/or technical support for FSRBs. We welcome the FATF’s ongoing work on money laundering risks resulting from environmental crimes, and recognise the links between climate and biodiversity threats and other serious crimes. We reaffirm our commitment to fully implement and strengthening AML/CFT global standards on beneficial ownership transparency and virtual assets regulation and supervision within our respective jurisdictions. We strongly support the FATF’s ongoing project to revise the current recommendation on beneficial ownership transparency.

G20 shows a complete disregard for the harmful aspects of the FATF-recommendations, like the risks ‘beneficial owners’ (BOs) face as a result of the dangerous legislation in regard of BOs (privacy- and security-risks).

Over Ellen Timmer, advocaat ondernemingsrecht @Pellicaan

Verbonden aan Pellicaan Advocaten, http://www.pellicaan.nl/, kantoor Rotterdam, telefoon 088-6272287, fax 088-6272280, e-mail ellen.timmer@pellicaan.nl ||| Weblogs: algemeen: https://ellentimmer.com/ || modernisering ondernemingsrecht: http://flexbv.wordpress.com/ ||| Motto: goede bedoelingen rechtvaardigen geen slechte regels
Dit bericht werd geplaatst in English - posts in English on this blog, Financieel recht, onder meer Wft, Wtt, Fraude, witwasbestrijding, Wwft, Grondrechten, rechtsstaat e.d., Ubo-register en getagged met , , , , , , . Maak dit favoriet permalink.

Geef een reactie

Vul je gegevens in of klik op een icoon om in te loggen.

WordPress.com logo

Je reageert onder je WordPress.com account. Log uit /  Bijwerken )

Google photo

Je reageert onder je Google account. Log uit /  Bijwerken )

Twitter-afbeelding

Je reageert onder je Twitter account. Log uit /  Bijwerken )

Facebook foto

Je reageert onder je Facebook account. Log uit /  Bijwerken )

Verbinden met %s