Insurance Europe has published its response to a consultation conducted by the Financial Action Task Force (FATF) on beneficial ownership, which is where property is owned under another name.
Official registers are the best way to record beneficial ownership as they allow for a structured and comprehensive approach (ie the centralisation of all legal persons’ data) and guarantee adequate, accurate and up-to-date information.
In several EU member states the procedure for consulting registers has been made more effective, but further improvements are needed. In addition, further improvements are needed to the interconnection of registers at EU level. In fact, even though interconnection is the best solution for dealing with the beneficial ownership of foreign legal entities, its implementation is still far from being completed.
To ensure that the official register is effective, it must meet certain conditions:
- There must be measures to ensure completeness, such as an obligation for legal persons to declare their beneficial owners to the register, combined with measures to monitor compliance with these obligations (eg, effective sanctions in the event of non-declaration).
- Authorities in charge of the register should ensure the quality of the data it contains, including verification that the beneficial ownership information is adequate, accurate and up to date.
- The register should be accessible to persons subject to anti-money laundering/countering the financing of terrorism (AML/CFT) rules and free of charge, as part of the implementation of AML/CFT vigilance.
- Consultation of the register by persons subject to AML/CFT rules must be automated and suitable for mass consultations.
- Consultation of the register by entities subject to the register must be carried out by means of homogenised/standardised technical solutions (ie, it must have a single IT solution).
- The register must be consulted by means of a standardised identification key for legal persons (international identification number).
- In several EU member states the procedure for consulting registers was made more effective, but further improvements are needed. In addition, further improvements are needed to the interconnection of registers at EU level. In fact, even though interconnection is the best solution for dealing with the beneficial ownership of foreign legal entities, its implementation is still far from being completed.
- A different approach would be less effective, as it would not allow the same quality and reliability of information. For instance, the provision of beneficial ownership information by regulated persons would be dependent on the information-handling procedures of each regulated person. This, as well as the multiplication of sources of information could lead to a loss of efficiency.
A different approach would be less effective, as it would not allow the same quality and reliability of information.
For instance, the provision of beneficial ownership information by regulated persons would be dependent on the information-handling procedures of each regulated person. This, as well as the multiplication of sources of information, could lead to a loss of efficiency.
