FATF Recommendation 25 — Beneficial Ownership of Legal Arrangements defines payment-sector compliance duties for trusts and comparable legal arrangements with a material jurisdictional connection.
TL;DR:
- Covers Trusts and comparable legal arrangements with a material jurisdictional connection.
- Identify beneficial owners; maintain adequate, accurate and up-to-date ownership information; assess risk; provide rapid authority access; apply proportionate sanctions.
- Provide ownership information to competent authorities and submit suspicious transaction reports where national law requires.
- Sets an international standard implemented through national laws and supervision.
Summary
Recommendation 25 applies beneficial-ownership transparency principles to express trusts and similar legal arrangements. Relevant information includes the settlor, trustees, protector where applicable, beneficiaries or class of beneficiaries, and other natural persons exercising ultimate effective control. The objective is timely access by competent authorities to adequate, accurate and current information.
A legal arrangement differs from a company: ownership, administration and benefit can be distributed among several roles. Looking only for a shareholder percentage can therefore miss the people whose identities matter. Trustees' information responsibilities and the ability of authorities to obtain records are central to the framework.
For a financial institution, a trust relationship calls for understanding the arrangement and its parties as well as the person presenting instructions. FATF's recommendations establish the international standard; national law determines the detailed obligations, registries, access arrangements and sanctions that apply in practice.
Keywords
- FATF Recommendation 25 — Beneficial Ownership of Legal Arrangements
- FATF Recommendation 25
- FATF Recommendation 25 and Interpretive Note
- FATF Recommendation 25 — Beneficial Ownership of Legal Arrangements summary
- FATF Recommendation 25 — Beneficial Ownership of Legal Arrangements requirements
- FATF Recommendation 25 — Beneficial Ownership of Legal Arrangements compliance
- Global payment regulation
- Global financial regulation
- Financial Action Task Force regulation
- customer due diligence