FATF Recommendation 25 extends beneficial-ownership transparency to trusts and comparable legal arrangements. It seeks accurate, current information, risk assessment and rapid authority access, with duties and proportionate sanctions implemented through the national legal framework.
TL;DR:
- Trust transparency covers settlors, trustees, protectors, beneficiaries and ultimate controllers.
- Authorities need efficient access to adequate, accurate and current information.
- Trust roles require separate analysis; national implementation determines binding duties.
Summary
Transparency for legal arrangements
Recommendation 25 applies to express trusts and similar legal arrangements, complementing Recommendation 24's treatment of legal persons. A trust relationship can distribute ownership, administration and benefit among different parties. Looking only for a shareholder percentage may therefore miss the people relevant to the arrangement. The framework addresses transparency of these roles so a legal structure cannot readily conceal the natural persons behind assets or instructions.
The parties whose information matters
FATF identifies the settlor, trustees, protector where applicable, beneficiaries or class of beneficiaries and other persons exercising ultimate effective control. Comparable roles matter in arrangements similar to express trusts. The institution needs to understand both the arrangement and the person presenting instructions; an authorised representative is not automatically the only beneficial owner. Where a party is itself a legal person, the analysis can require understanding the natural persons behind that entity as well.
Information quality and authority access
The standard seeks adequate, accurate and up-to-date information that competent authorities can obtain efficiently and in time. Countries assess the risks associated with misuse of legal arrangements and establish mechanisms for maintaining and verifying relevant information. Trustees' information responsibilities and cross-border cooperation are important because the parties, assets and administration can be located in different places. A file containing names without a reliable account of their roles would not answer the same transparency question.
Guidance and binding national requirements
FATF revised Recommendation 25 in 2023 and issued updated risk-based guidance in 2024. The guidance supports countries and private-sector users and complements the material on legal persons; it is not a substitute for national law. Domestic implementation determines detailed trustee duties, access arrangements, registries where relevant and sanctions. For a payment institution serving a trust, the practical connection is understanding the arrangement and its parties within the applicable customer-due-diligence and reporting framework.
Keywords
- Recommendation 25
- express trusts
- legal arrangements
- settlors
- trustees
- protectors
- beneficiaries
- effective control
- authority access
- ownership transparency