At the last G20 summit in Australia, the Anti-Corruption Working Group (ACWG)  reported to Finance Ministers and Central Bank Governors that the ACWG agreed that G20 countries will lead by example by developing G20 High-Level Principles on Beneficial Ownership Transparency that will set out concrete measures G20 countries will take to prevent the misuse of and ensure transparency of legal persons and legal arrangements.

The High-Level Principles on the Beneficial Ownership Transparency are the following:

1) Countries should have a definition of ‘beneficial owner’ that captures the natural person(s) who ultimately owns or controls the legal person or legal arrangement.

2) Countries should assess the existing and emerging risks associated with different types of legal persons and arrangements, which should be addressed from a domestic and international perspective.

a) Appropriate information on the results of the risk assessments should be shared; with competent authorities, financial institutions and designated non-financial businesses and professions (DNFBPs) and, as appropriate, other jurisdictions. As identified by the Financial Action Task-force
b) Effective and proportionate measures should be taken to mitigate the risks identified.
c) Countries should identify high-risk sectors, and enhanced due diligence could be appropriately considered for such sectors.

3) Countries should ensure that legal persons maintain beneficial ownership information onshore and that information is adequate, accurate, and current.

4) Countries should ensure that competent authorities (including law enforcement and prosecutorial authorities, supervisory authorities, tax authorities and financial intelligence units) have timely access to adequate, accurate and current information regarding the beneficial ownership of legal persons. Countries could implement this, for example, through central registries of beneficial ownership of legal persons or other appropriate mechanisms.

5) Countries should ensure that trustees of express trusts maintain adequate, accurate and current beneficial ownership information, including information of settlors, the protector (if any) trustees and beneficiaries. These measures should also apply to other legal arrangements with a structure or function similar to express trusts.

6) Countries should ensure that competent authorities (including law enforcement and prosecutorial authorities, supervisory authorities, tax authorities and financial intelligence units) have timely access to adequate, accurate and current information regarding the beneficial ownership of legal arrangements.

7) Countries should require financial institutions and DNFBPs, including trust and company service providers, to identify and take reasonable measures, including taking into account country risks, to verify the beneficial ownership of their customers.

a) Countries should consider facilitating access to beneficial ownership information by financial institutions and DNFBPs.
b) Countries should ensure effective supervision of these obligations, including the establishment and enforcement of effective, proportionate and dissuasive sanctions for non-compliance.

8) Countries should ensure that their national authorities cooperate effectively domestically and internationally. Countries should also ensure that their competent authorities participate in information exchange on beneficial ownership with international counterparts in a timely and effective manner.

9) Countries should support G20 efforts to combat tax evasion by ensuring that beneficial ownership information is accessible to their tax authorities and can be exchanged with relevant international counterparts in a timely and effective manner.

10) Countries should address the misuse of legal persons and legal arrangements which may obstruct transparency, including:

a) prohibiting the ongoing use of bearer shares and the creation of new bearer shares, or taking other effective measures to ensure that bearer shares and bearer share warrants are not misused; and
b) taking effective measures to ensure that legal persons which allow nominee shareholders or nominee directors are not misused.

As a result, it can be noted that another international forum has highlighted the need to prevent the misuse of corporate vehicles for the benefit of money launders. The key message remains transparency. It will be seen if after these last pledges at G20 and FATF’s meeting words will become actions.

Source: G20 (Please click here for the full document)