Guidance on Beneficial Ownership and Transparency of Legal Arrangements

11 March 2024 – Following the February 2023 revisions to FATF Recommendation 25 on Beneficial ownership and transparency of legal arrangements, the FATF has updated its risk-based guidance for this Recommendation. The guidance complements the existing guidance on Recommendation 24 on legal persons and aims to help stakeholders from the public and private sectors to implement the new requirements more effectively.

The Guidance aims to assist countries and the private sector to better understand how transparency requirements apply to legal arrangements.  It sets out practical guidance on how to understand and assess the money laundering and terrorist financing risks associated with trusts and similar legal arrangements. It explains the FATF’s requirements to obtain adequate, accurate and up-to-date beneficial ownership information for express trusts and similar legal arrangements, and highlights mechanisms to verify this information.  The Guidance highlights the importance of international co-operation, given that such arrangements may potentially be abused to facilitate cross-border money laundering or terrorist financing.

The guidance reflects input from public consultations and extensive engagement with the private sector and other stakeholders. The guidance completes a comprehensive body of work aimed at improving transparency of beneficial ownership globally. FATF’s strengthened standards and guidance in this area will help identify the corrupt actors, sanctions evaders, money launderers and tax evaders who hide or launder their criminal property or activities in shell companies or other complex structures as well as trusts or other legal arrangements. 

The FATF will assess countries’ implementation of these requirements during its upcoming round of mutual evaluations.