Transparency International published a new report on 17th October says that governments are failing to tackle international money laundering and tax fraud because police do not have the tools to track down the owners of companies suspected of criminal activity.  It says that analysis shows that poor performance in FATF assessments is strongly linked to a reliance on data held by banks; and argues that FATF should require countries to establish central registers of the real owners of companies – with public registers to allow better verification of information.  It notes that FATF requires governments to ensure that authorities can quickly find out who the real or ‘beneficial’ owners of companies registered in their territory are (see Recommendation 24 and Immediate Outcome 5).  However, of 83 countries assessed by FATF since 2014, only one (Trinidad and Tobago) fully complies with this rule – and no country is considered to be ‘highly effective’ in this area.  In the vast majority of 26 countries analysed in detail (including the UK, US, Isle of Man and Panama), authorities rely on information collected by banks and other reporting entities and this impedes investigations, with cross-border ownership and banking structures creating additional hurdles.  FATF’s assessment teams found it easier for authorities to access information in countries where there is a central register of company ownership.  Transparency International urges FATF to revise its recommendations to adopt a multi-pronged approach to beneficial ownership information, with reporting entities and companies themselves being required to maintain accurate and reliable information to complement central registers.

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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