Beneficial ownership and control – global progress

The Financial Action Task Force proposed changes that would require countries to have beneficial ownership registries at its meeting last week. FATF is an intergovernmental body and anti-money laundering watchdog, whose recommendations strongly influence governments’ policies.

The release of the Pandora papers this month revealed that corrupt political and business elites have been benefiting from a ‘no change’ situation. They further highlighted why a better standard on beneficial ownership registers is urgently needed.

​Anti-corruption agency advocacy

Anti-corruption organisations like ours have been vigorously advocating for more tools to fight money laundering such as beneficial ownership registers, as the Financial Action Task Force (FATF) deliberated amendments to the global standards.

The expert opinion of Transparency International is that we are finally a step closer to ending the abuse of anonymous shell companies and the damages caused to economies by secret corporate structures.

​FATF Has Responded

FATF have responded, and it looks like beneficial ownership registers are finally on track to become a requirement worldwide. The next few months will be critical for ensuring that the proposed standard is further strengthened and not watered down by governments and business groups.

One of the most important proposed changes to ‘Recommendation 24’ is for a “Multipronged approach to collection of Beneficial Ownership information that includes a compulsory company approach, a requirement for a public authority or body to hold beneficial ownership information (a beneficial ownership registry or another body) or an alternative mechanism, and the supplementary measures.

FATF’s proposed changes are now up for consultation until December 2nd.

Maíra Martini, Transparency International’s anti-money laundering expert, said:

“We are pleased to see that FATF has stepped up and the growing momentum for greater beneficial ownership transparency has finally caught on. The proposals to include more detailed guidance on the minimum requirements for an effective beneficial ownership transparency regime – despite prior resistance of some member countries – have the game-changing potential.”

We continue to advocate for a further step that beneficial ownership registers be publicly accessible. The FATF is not making this recommendation.

​TINZ contribution

Transparency International New Zealand has long advocated for greater transparency of who owns, and controls companies, and trusts that are held or established in New Zealand. TINZ has contributed to Transparency International documents, as well as advocating in New Zealand. Our recent advocacy includes participation in the review of New Zealand’s FATF/AML legislation (TINZ represented by Adam Hunt and Mark Bennett).

What can New Zealand do? At the moment our lack of transparency still enables tax avoidance, the hiding of financial assets and the concealment of international proceeds of corrupt activity. The problem is well understood and global standards are lining up to deal with it. We just need to get on with it.

Fortunately there is clear guidance. The Financial Action Task Force Mutual Evaluation assessment of New Zealand published in April 2021 recommended that New Zealand strengthen the visibility of who controls companies and trusts. It also recommended that the regulators need to be better resourced to analyse market trends, supervise banks and enforce financial sanctions.

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