FIXING THE GLOBAL STANDARDS ON COMPANY OWNERSHIP

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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https://www.transparency.org/whatwedo/publication/who_is_behind_the_wheel_fixing_the_global_standards_on_company_ownership

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LATVIA: CASE STUDIES ON HOW TERRORIST FINANCING COULD HAPPEN

On 17th October, LSM reported that the Latvian State Security Service (VDD) has developed a strategy for the prevention of terrorism financing for the years 2019-2021.  It says that the VDD stressed that the terrorism threat level in Latvia remains low but that terrorism is still one of the main security threats in Europe and worldwide.  However, it said, the most eye-catching parts of the strategy are several case studies that reveal how Latvian companies, banks and ports have in the past been part of criminal plans for terrorist financing and sanctions-busting schemes or to facilitate the transit of dangerous goods.  The guidelines say that increased attention must be paid also to deals with Russia and transportation of goods through its territory; and that Russia co-operates also with other countries subjects to sanctions (Iran, North Korea), which causes additional risk to get indirectly involved in the implementation of circumvention of sanctions.

https://eng.lsm.lv/article/society/defense/state-security-service-outlines-terrorist-financing-sanctions-busting-attempts-from-latvia.a335445/

The report is available at –

https://vdd.gov.lv/en/useful/informative-materials/

This blog is primarily for my own use, to keep informed and up to date. However, if you would like to say thank you (and perhaps help me get a new, better laptop when I am away…) you can “buy me a coffee” at https://www.buymeacoffee.com/KoIvM842y