On March 10th, 2023, the Financial Action Task Force (FATF) released updated guidance focused on beneficial ownership transparency of legal entities, specifically Recommendation 24. This update builds upon the tougher global beneficial ownership standards agreed upon in March 2022 by requiring competent authorities to have access to accurate, up-to-date information on the true owners of companies.

The revised Recommendation 24 mandates a multi-pronged approach to collecting beneficial ownership information. This approach ensures that adequate and accurate information on the beneficial ownership of legal entities is available and can be accessed by competent authorities in a timely manner. The revised Recommendation also requires countries to take a risk-based approach, considering the risks posed by legal entities in their own countries, as well as those posed by foreign-created legal entities with sufficient links to their country.

The updated guidance outlines the types and sources of relevant information, as well as the mechanisms and sources to obtain such information. This includes the multi-pronged approach of combining information from companies themselves, public authorities in a registry, or alternative mechanisms that ensure rapid and efficient access to beneficial ownership information.

It's important to note that the updated guidance is non-binding and does not override national authorities. As for legal arrangements covered under Recommendation 25, FATF's 2014 guidance should be referenced until subsequent updates.

These updates signify a significant step towards enhancing transparency and fighting financial crimes such as money laundering and terrorism financing. By prioritizing beneficial ownership transparency, the FATF is taking an important step towards making the global financial system more secure and accountable.