How do you talk to someone about their BO?

No, not that particular problem: thanks to the proliferation of manly deodorants called things like Overlord or Hunkmeister, plus aircon, the problem of the whiffy colleague has generally gone.  I’m talking about that other unmentionable: beneficial ownership.  With the revision of the FATF’s Forty Recommendations in February 2012, and their incorporation into the draft EU Fourth Money Laundering Directive, beneficial ownership will soon have nowhere to hide.

The ideal situation would be for every jurisdiction to put in place the same regime – to demand the same (high) level of information about beneficial ownership of companies incorporated in their country.  In reality, we have to admit that there will still be differences, which of course is a shame as differences lead inevitably to loopholes and the much-dreaded “regulatory arbitrage” whereby the dodgy and the nearly-dodgy look for the most welcoming host.  At the moment, it’s something of a waiting game: we’re waiting for MLD4 proper, and then we’ll wait for its implementation by EU member states (and others who wish to emulate that standard).

But one country has stepped out (there may be others, but this one caught my eye): little Montserrat.  All forty square miles of it have decided this week that they are going to put in place pretty tough requirements around BO, including “introducing provisions in the Companies Act to require companies to obtain and hold adequate, accurate and current information on their controllers and owners and introducing provisions in the Anti-Money Laundering and Terrorist Financing Regulations 2010 to require relevant service providers to obtain and hold adequate, accurate and current information of the owners and controllers of persons who they are obliged to apply customer due diligence measures), and “introducing provisions in the Companies Act to require incorporators of legal entities to provide the Companies Registrar at registration with details of companies’ beneficial owners and controllers and the requirement to file, in a timely manner, notices of changes of beneficial owners and controllers”.  I like the phrase “owners and controllers”, and I like the cut of Montserrat’s jib on this issue.

This entry was posted in AML, Due diligence, Money laundering and tagged , , , , , , , , , , , . Bookmark the permalink.

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