AML POLICY
corporations and trusts and take reasonable measures to verify
those identities.” 10 A similar conclusion was made by FATF’s
U.S. AML/CTF framework assessment in 2016. Even though
the overall evaluation was positive, there were two significant
gaps found in the regime: exclusion or limited obligations for
non-FIs and service providers, and a lack of timely access to
current and accurate beneficial ownership information for reg-
ulators and law enforcement.
This criticism seems to be having an effect. In June 2016,
FinCEN finalized its long-outstanding beneficial ownership
rule, which extends customer due diligence requirements
under Bank Secrecy Act (BSA) rules to the natural persons
behind a legal entity. In addition, a new bill, the “Combating
Money Laundering, Terrorist Financing, and Counterfeiting
Act of 2017,” has been recently proposed. This would intro-
duce a new offense regarding the concealment of the source
of funds in a transaction, including when such a source is a
foreign politically exposed person, family member, or a close
associate. The proposal stipulates penalties of up to 10 years’
imprisonment, up to a $1 million fine, or both.
In June 2017, a bipartisan group of U.S. lawmakers intro-
duced the Corporate Transparency Act, which would require
FinCEN to collect information on the beneficial owner(s) of
companies incorporated in the U.S. if the information has not
been collected at the state level. Another group of lawmakers
has also introduced the True Incorporation Transparency for
Law Enforcement Act, a similar piece of legislation, which
would instead have states collect the information.
Summary
While governments are debating the form and scope of col-
lecting beneficial ownership information, FIs and DNFBPs,
covered by know your customer rules under AML and ABC
regimes, are already obligated to collect and verify that infor-
mation. However, while information disclosed by the cus-
tomer is insufficient, other sources of information are rare in
most locations. Among jurisdictions that allow online or
in-person retrieval of corporate registry information, only 36
percent provide direct shareholding information. Even after
the Panama Paper revelation, little has changed. Only a hand-
ful of countries have improved accessibility to information.
Regulators expect FIs to stand against financial crime, but
they do not facilitate the fight by making the corporate date,
including the ownership information, accessible to all. If gov-
ernments do not follow through with their commitments to
eradicate anonymous corporate vehicles and if obscure inter-
national structures are not honored, criminals will continue to
hide behind them. Our role as members of civil society
remains critical in demanding that follow-through.
Sylwia Wolos, CAMS, head of EDD proposition, Thomson
Reuters, London, U.K., [email protected]
“Financial Sector Assessment Program,” International Monetary
Fund, June 2015, http://www.imf.org/external/pubs/ft/ scr/2015/
cr15170.pdf
10
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