Michael Calleja | Senior Compliance Services Executive
In March 2023, the Financial Action Task Force (FATF) published its updated Guidance on Beneficial Ownership of Legal Persons, aiming to help countries implement the revised Recommendation 24. This revision sets more stringent global beneficial ownership standards, preventing the misuse of anonymous shell companies and other businesses to conceal illicit activities.
The FATF defines a beneficial owner as “the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.” This includes individuals exercising ultimate effective control over an entity.
Countries are advised to identify, design, and implement appropriate measures in line with revised Recommendation 24, ensuring that beneficial ownership information is held by a public authority, a beneficial ownership registry, or an alternative mechanism that enables efficient access to the information. The guidance also assists countries in assessing and mitigating money laundering (ML) and terrorist financing (TF) risks associated with foreign companies.
The document emphasizes the responsibility of obliged entities, or subject persons, to establish internal controls, provide employee training, and conduct regular audits for ongoing compliance with AML/CFT regulations. While obliged entities include financial institutions, designated non-financial businesses and professions (DNFBPs), and virtual asset service providers (VASPs), the guidance is not limited to these entities. All legal persons should maintain accurate and up-to-date beneficial ownership information.
Additionally, the FATF highlights the sources of relevant information and the mechanisms used to obtain it, such as the multi-pronged approach. This approach combines information from companies, public authorities in a registry, or alternative mechanisms, ensuring rapid and efficient access to beneficial ownership information. FATF’s mutual evaluations showed that countries using a multi-pronged approach were more effective in preventing criminal misuse of legal persons and ensuring transparency of beneficial ownership than countries using a single approach.
Non-compliance with the Guidance Note carries significant risks for companies and individuals, including potential administrative, civil, or criminal sanctions, financial or non-financial penalties, and reputational damage. Thus, it is crucial for subject persons to remain fully compliant with all applicable Beneficial Ownership Regulations.
Aspida representatives are well-equipped to help subject persons ensure regulatory compliance. We offer a comprehensive range of services, including internal audits, compliance health checks, on-site visits, interviews with Senior Managers, bespoke advice for Money Laundering & Reporting Officers (MLROs), and assistance with constructing and revising Risk Assessments and sample testing of client files.
Furthermore, Aspida can support practitioners in complying with the new Guidance Note by providing expert advice on implementing appropriate measures aligned with revised Recommendation 24. Our team is proficient in identifying and designing measures to maintain beneficial ownership information properly, ensuring efficient and prompt access during on-site inspections.
In conclusion, Aspida is a trusted partner for subject persons seeking to maintain regulatory compliance and adapt to ever-evolving guidelines. Our extensive range of services, including bespoke advice, on-site support, and overall expertise, empowers our clients to navigate the complex regulatory landscape confidently. By partnering with Aspida, subject persons can safeguard their operations and uphold the highest compliance standards, fostering a transparent and secure financial environment.
For a discussion on options available to facilitate your requirements, please contact email@example.com in the first instance.