Beneficial Ownership

Bilateral Activities

Bilateral activities are specifically tailored to the needs of the partner jurisdiction and are undertaken jointly with the partners’ own authorities applying the EU Global Facility’s technical knowledge and methodology.

Support activities are implemented on a gradual timeframe, with various workstreams targeting policy makers, financial supervisors and regulators, beneficial ownership registries, law enforcement agencies, financial institution and other relevant businesses and professions (e.g., lawyers, notaries, accountants, real estate agents).

BO strategy and communication workstream

Under the BO strategy and communication workstream, the EU Global Facility on AML/CFT works with partner jurisdictions to develop effective BO strategies, operating models, and workplans to structure and enable to monitoring of the beneficial ownership disclosure system in the jurisdiction. This work usually involves an in-depth analysis of the country’s beneficial ownership framework to identify its features and areas of improvements, it is followed by close discussions with authorities from the partner countries to discuss those findings and identify those activities that will be best suited to address the identified issues. Ultimately, this activity results in countries having a better understanding of the shortcomings or issues to address and the practical steps that need to be taken to address them, as well as a clear vision in terms of the time that will be needed for their implementation. This initial activity identifies activities that can be effectively delivered in the short (3 months), mid (6 months) and long term (one year and beyond). It embeds in its nature the sustainability required from international organisations when assessing national BO disclosure systems.

Technical Compliance workstream

Under the technical compliance workstreams, the EU Global Facility provides hands-on support in the drafting and review of current and foreseen legislation and regulations. This allows the project to complement this work with the drafting of guidance that will serve as a basis for authorities to engage between themselves as well as with the regulated entities from the private sector. As such, the project offers support in legal and regulatory drafting to align national frameworks with international standards and assist authorities in disseminating the new requirements to all relevant stakeholders.

BO Registers Operations and IT workstreams

Under the BO registers operations and IT workstreams, the project develops activities aimed at enhancing the effectiveness of the legal and regulatory frameworks in view of the enhanced focus from FATF and the EU of the increasing crucial role played by beneficial ownership registers in the fight against money laundering and terrorism financing. The project advises jurisdictions in that regard on the practical implementation of BO registers, from the identification of the business and technical requirements related to the set-up of the IT solution, the procurement and monitoring of these IT developments, to the training and change management that authorities in charge of such registers need to implement to evolve into fully fledge competent authority able to ensure the highest level of quality of the information held in such registers.

Guidance and Supervision workstreams

Under the Guidance and Supervision workstreams, the EU Global Facility developed state of the art support, guidance, and manuals to assist various supervisors in the implementation and enforcement of the beneficial ownership disclosure requirements. These guidance and manuals are also designed as a tool for said authorities to engage with their supervised entities, helping build the necessary partnerships that are crucial in the area of AML/CFT.

Risk Assessments of Legal Persons and Legal Arrangements

Lastly, the EU Global Facility also developed its own Risk Assessments of Legal Persons and Legal Arrangements to support country in identifying and mitigating the potential risks related to the misuse of legal persons and arrangements. This activity, usually taking between 12 and 18 months involves a large number of relevant authorities with which the project experts engage on one on one or groups discussions.

Video Gallery

Discover some of our experts’ interviews on various BO-related topics.

EU GF Technical Assistance

Our Key Expert on Beneficial Ownership Alexandre Taymans speaks about the importance of supporting countries in strengthening their BO standards and guidance.

paul-hondius-eu-global-facility-beneficial-ownership

Paul Hondius – OECD

Head of the Harmful Tax Practices at the OECD speaks to the EU Global Facility on AML/CFT about the critical intersection of beneficial ownership and tax crime.

Marconi Costa Melo

Brazil’s National Coordinator on AML/CFT highlights the importance of information sharing on a national and international level to improve asset recovery in cases of money laundering.

Guna Puce Paidere

Short Term Expert for the EU Global Facility, speaks of Latvia’s experience with Beneficial Ownership Registers.

Adrian Wardzynski

Counsel at the International Monetary Fund discusses the regional trends on Beneficial Ownership in Latin America.

Dayra Carrizo Castillero

Superintendente de Sujetos No Financieros at the SSNF speaks about AML/CFT in Panama

Thematic Activities

BO transparency is a fast-moving, highly technical and complex area that requires international organisations, national institutions and supervisors as well as the broader general public to develop on an ongoing basis their knowledge and understanding of the new trends, risks and threats posed by the misuse of legal vehicles and the obfuscation of BO information as well as practices and innovative solutions developed by countries to face these common challenges.

In order to best address this, the EU Global Facility designs and implements activities in collaboration with a wide range of partners and experts from both public and private sectors. Through education and discussion organised in various formats, the BO thematic activities seek to build long-term resilience through the development of networks experts, institutions, and stakeholders.

Thematic issues addressed by the EU Global Facility take the form of expert groups, closed webinars for competent authorities, FATF Style Regional Bodies and other partner organisations.

These activities seek to explore new, innovative, or emerging topics, trends and risks based around a specific theme. Thematic activities often lead to closer support through bilateral activities with partners.

Current themes being explored include:

Transforming of BO registries into competent authorities

In its work on the current approaches to Beneficial Ownership registration and exploring solutions and potential ways forward that can also be shared in the context of its technical assistance activities to partners jurisdictions, the EU Global facility is exploring the possibility of Beneficial Ownership Registers evolving into Competent Authorities.

The discussions members of the group of experts highlighted that there are various key aspects and building blocks that jurisdiction should focus on when setting-up such system. These include for instance the technological solutions used for interconnecting data bases and enabling beneficial ownership registration, the ways in which verification, supervision and enforcement can be ensured through data analysis and onsite inspections, the use of guidelines for jurisdictions that are in the process of setting up their frameworks in relation to them.

The goal of this activity is to ‘handbook’ tangible proposals and best practice that can be made available to stakeholders and jurisdictions who are seeking to build or enhance national beneficial ownership capabilities.

Challenges in identifying and verifying BO information in complex ownership structures

Complex ownership structures affect beneficial ownership transparency because the more complex the structure, the harder it will be to identify the beneficial owner or at least to verify their identity.

In order to prevent complex ownership structures from affecting beneficial ownership transparency, countries need first to define “complexity” and then establish measures to regulate or prevent them.

To assist partner jurisdictions in finding solutions to tackle these issues, the Global Facility is organising a series of events with experts and country authorities to present and discuss cases of complex structures to allow for a list of indicators to be established and possible mitigation measures to be identified.

Using of beneficial ownership registers to enforce targeted financial sanctions, and the path towards other asset registries

Many countries have been establishing a beneficial ownership register which makes information available on the beneficial owners of local legal vehicles such as companies and trusts. However, this information is usually insufficient to determine the beneficial owners of hard assets, such as real estate, private jets or yachts that are located in one country, let alone to bring transparency to the foreign assets held abroad by local citizens.

This lack of information on assets, including on assets located within a country where merely legal ownership may be available, makes the fight against money laundering, the enforcement of sanctions and the recovery of assets very hard, if not impossible. To tackle this problem, different actors have been asking for more transparency on asset ownership and eventually to the establishment of global asset registries (GAR).

The work conducted by the project on this topic aims to present the challenges to obtain beneficial ownership information on assets to enforce sanctions and to tackle money laundering, fostering discussions on policy measures to tackle those challenges and to improve beneficial ownership transparency on assets based on the experiences of country authorities and other stakeholders including the private sector and civil society organisations.

Delivering public access to beneficial ownership registers and the right to privacy

To comply with the European Union Anti-Money Laundering Directive as amended in 2018, EU countries were required to establish public registries to beneficial ownership information of local legal persons. Most EU countries therefore established public and online beneficial ownership registries, in some cases for free and in others, after paying a fee.

In 2022, the European Union also started discussions on more reforms, called the AML Package to adopt a new amendment to the AML Directive. Some of the proposals referred to expanding beneficial ownership transparency in terms of scope, definitions, and access.

However, on November 22nd 2022, the European Court of Justice ruled that the provisions of the AMLD requiring the beneficial ownership information to be (partially) available to the public was invalid. This decision resulted in the previous provision to be reinstated, which required that access to beneficial ownership information be based on the condition of demonstrating a “legitimate interest”.

In relation to “legitimate interest” the Court reaffirmed that civil society organisations involved in anti-money laundering as well as journalists have a legitimate interest to access beneficial ownership information.

The Global Facility is conducting work on this topic to assist partners and further promote discussion on the access to beneficial ownership register information.

Our Publications on BO

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