On 10 March 2023, the Financial Action Task Force (FATF) published updated guidance that focuses primarily on Recommendation 24 (beneficial ownership transparency of legal persons). In March 2022, the FATF agreed on tougher global beneficial ownership standards in its Recommendation 24 by requiring countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies.

The revised Recommendation 24 explicitly requires countries to use a multi-pronged approach (to use a combination of different mechanisms) for the collection of beneficial ownership information to ensure that adequate, accurate and up-to-date information on the beneficial ownership of legal persons is available and can be accessed by competent authorities in a timely manner.

The revisions to Recommendation 24 also require countries to follow a risk-based approach and consider the risks of legal persons in their countries, not only those posed by legal persons created in their countries, but also by foreign-created legal persons with sufficient links with their country.

The updated guidance covers the types and sources of relevant information, and the mechanism and sources to obtain such information. This includes the multi-pronged approach, which consists of combining information from, among others, companies themselves, public authorities in a registry, or alternative mechanism if it ensures rapid and efficient access to beneficial ownership information. 

The updated guidance is non-binding and does not override the purview of national authorities.

As regards legal arrangements as covered under Recommendation 25, FATF’s 2014 guidance should be referred to until the subsequent update of guidance.