Coverage of corporate vehicles in beneficial ownership disclosure regimes

Publication date: 27 April 2023
Author: Alanna Markle

Determining the corporate vehicles to be covered

A corporate vehicle being covered by BO disclosure requirements refers to the positive obligation in law for a corporate vehicle to disclose information about its beneficial owners to a responsible body, and to keep this information up to date. It does not refer to which information will be accessible to which parties. When determining the scope of their BO regime, those with responsibilities for policy design and implementation should start by forming a picture of the domestic and foreign corporate vehicles operating in their jurisdiction, taking into account that these may change over time, and then:

establish which corporate vehicles are relevant to a jurisdiction’s policy aims, and ensure they are included in disclosure requirements;
consider that for the broadest set of policy aims – including AML/CFT – all corporate vehicles are relevant; and
consider if there are any categories of vehicles that meet the criteria but may be reasonably exempt from the full set of disclosure requirements, and ensure the requirements placed on corporate vehicles are proportional to meeting policy aims.

A jurisdiction’s definition of beneficial ownership sets out the forms of ownership and control that constitute an individual being a beneficial owner, and therefore may implicitly exclude certain corporate vehicles based on how assets can be owned or controlled through them. Some jurisdictions only consider the coverage of corporate vehicles after defining beneficial ownership in law, which may prove to be restrictive either at the point of initially determining the scope, or when revisiting it at a later point in time. The definition should be considered jointly with the scope of disclosure requirements because it determines which corporate vehicles can be legally beneficially owned.

Policymakers should primarily consider the relevance of different types of corporate vehicles. Rather than introducing blanket exclusions of categories of corporate vehicles, specific exemptions can help ensure that the requirements placed on individuals and corporate vehicles are reasonable and proportionate, as detailed below.

Establishing which corporate vehicles are relevant

Determining criteria to assess the relevance of corporate vehicles to the jurisdiction’s policy aims is fundamental in defining its scope. AML/CFT is one of the main policy drivers for BOT, and all corporate vehicles are relevant to that aim, as detailed below. Evidence from AML/CFT also suggests that all entities and arrangements will be relevant to most regimes, and to achieving the widest set of policy aims (see Box 1). This includes all domestic corporate vehicles, and certain foreign corporate vehicles, provided that they are not subject to adequate disclosure requirements in their jurisdiction of incorporation or that this information is not readily accessible.

To explain why all corporate vehicles are relevant to the broadest set of policy aims, the following sections detail specific considerations and pitfalls when setting the scope for disclosure. These include commonly used criteria to inform the coverage of corporate vehicles that risk undermining a regime’s effectiveness, and particular types of corporate vehicles that require specific attention.

Box 1: Legal entities and arrangements

Corporate vehicles refer to both legal entities and arrangements.

Legal entities are the most common corporate vehicle. This construct has a separate legal personality, meaning it can do many of the things a natural person can do in law in its own name, including: owning assets, such as bank accounts, shares in other corporate vehicles, or real estate; entering into contracts and acquiring debt; and suing and being sued. [9] The liability of parties participating in legal entities, such as shareholders, partners, and directors, is often limited to their investments in the entity. This means their personal assets are protected from creditors to the entity. Examples include corporations, foundations, limited companies, and limited liability partnerships (LLPs).

Parties can establish legal arrangements to govern their relationship in pursuit of a common purpose or to create rights and obligations with respect to specified assets. The arrangement formed by a trust is typical to common law systems and has uses including creating a fiduciary obligation and oversight when transferring assets, for example, for estate planning or charitable donations, or to avoid conflicts of interest. [10] Similar examples in civil law systems include fiducia, certain types of Treuhand, fideicommissum, private foundations, and waqf. [11] Whilst their forms and uses vary, in many jurisdictions arrangements can be involved in commercial activity.

In many jurisdictions, most arrangements do not have a distinct legal personality. In some jurisdictions, however, certain arrangements may be considered to operate as legal entities. For example, case law in South Africa sometimes treats trusts as legal entities. [12] Similarly, Austria’s Beneficial Owners Register Act considers trusts and similar arrangements to be legal entities for the purposes of the Act. [13] The FATF limits the term legal arrangements to explicitly refer to “express trusts or other similar legal arrangements.” However, in some jurisdictions arrangements can include other corporate vehicles (e.g. partnerships), particularly when they do not have a separate legal personality. [14]

Consider all corporate vehicles, with and without a legal personality

A distinct legal personality has to date been a primary criteria for BO reporting for entities where the policy aim is AML/CFT, and it is the implicit defining characteristic for BO disclosure under FATF Recommendation 24. [15] However, a single law may govern corporate vehicles both with and without a legal personality. The FATF applies divergent and less stringent requirements to legal arrangements under Recommendation 25, despite the fact that different types of corporate vehicles are often used within the same structures (see Figure 2). [16] Many countries place different requirements on and legislate separately for the disclosure of trusts and similar legal arrangements, which may limit the effectiveness of reforms. As detailed later, using the same technical standards for all corporate vehicles improves the interoperability and utility of BO information.

Corporate vehicles without a legal personality can be and are used to derive benefit from assets whilst concealing an individual’s link to the asset, and to build additional layers of complex ownership chains. [17] Moreover, corporate vehicles without legal personality have been observed to de facto operate as entities with separate legal personality outside of their jurisdictions. For example, leaked information on SWIFT messages in the United States (US) Financial Crimes Enforcement Network (FinCEN) Files showed English Limited Partnerships (ELPs), a type of corporate vehicle in the United Kingdom (UK) with no legal personality, successfully managed to open bank accounts outside the UK (see Box 2, below). [18]

Limitations of the risk-based approach

To comply with international AML/CFT standards, the FATF requires jurisdictions to understand the risks posed domestically by corporate vehicles by conducting national risk assessments (NRAs), and to subsequently mitigate these risks as part of the risk-based approach. [19] Each country’s NRA should involve the creation and publication of a list that describes “the different types, forms, and basic features of legal persons in the country”, giving AML authorities an overview of corporate vehicles and a description of their “relevant features”. [20] This can assist with forming a picture of corporate vehicles in a jurisdiction. Under the FATF recommendations, risks identified through an NRA are used as criteria for excluding specific legal entities that are seen as low risk.

However, this approach has limitations, as excluding corporate vehicles from disclosure requirements can make them more attractive for misuse. This is especially relevant given that corporate vehicles formed in one jurisdiction may pose different risks in another jurisdiction. Whilst every jurisdiction is meant to conduct risk assessments, variability in corporate vehicles can make it challenging for authorities and financial institutions to discern the characteristics and risks of foreign-registered entities. NRAs are valuable for gaining a picture of corporate vehicles operating in a jurisdiction; for the monitoring and verification of the efficacy of an AML/CFT regime; and to inform a risk-based approach to verification. It has demonstrably fallen short as the basis for setting the scope of disclosure requirements.

Moreover, high levels of variation between corporate vehicles imply the need for broad criteria. The International Monetary Fund (IMF) highlights the importance of accounting for national variations in how corporate vehicles are defined and used, noting that, “even if the names of different categories of legal persons are the same between jurisdictions, their characteristics and use in practice can vary significantly between jurisdictions”. [21] Variations in the ways in which corporate vehicles operate and their ownership and control structures extend to those that have a similar name or description between and even within jurisdictions, as in the example of limited partnerships in the UK (see Box 2).

Therefore, broad criteria should be used as a starting point, and it is recommended that all corporate vehicles with or without distinct legal personalities through or by which assets can be owned, benefitted from, and controlled should be required to make declarations about their beneficial ownership, unless reasonably exempt.

Box 2: The exclusion and inclusion of limited partnerships in the scope of disclosure requirements in the United Kingdom

In the UK, a limited partnership (LP) is an arrangement between one or more general partners with unlimited liability, responsible for managing the partnership, and one or more limited partners only liable up to the amount of their investment. LPs are often used as investment vehicles in assets, such as real estate. [22] They are distinct from limited liability partnerships (LLPs) which always have a distinct legal personality, and in which all partners have limited liability protection and the ability to participate in management. LPs are attractive to investors because limited partners can be passive investors, and due to their flexibility in setting out rules on, for example, profit sharing. [23] The UK has three types of LPs: Scottish Limited Partnerships (SLPs), which have a separate legal personality, and ELPs and Northern Irish LPs (NILPs), which do not. Natural persons and domestic or foreign legal entities can be partners in an LP.

In 2013, the UK started consulting on the scope of its BO register. [24] Its discussion paper stated: “our starting point is that beneficial ownership information on all UK companies should be held in the registry”, and recognised the “need to consider […] other types of legal entit[ies]”. [25] In response to the consultation, in 2014, the government recognised the potential consequences of excluding entities, focusing on LLPs: “We want to ensure that the LLP form does not become an attractive alternative to a company to facilitate crime [by excluding them]”. [26] With respect to LPs, the government said that it was “also carefully considering the position in relation to [SLPs …] because, unlike [ELPs] and [NILPs], [SLPs] have separate legal personality”, and like LLPs, they are not created under the Companies Act 2006. The government proposed to “ensure that there are no loopholes or unintended consequences”. [27] Nevertheless, whilst the BO regime’s scope ended up being broader than just companies by including LLPs, SLPs (with legal personality) along with ELPs and NILPs (without legal personality) were excluded.

What followed is well documented and aligned with what the 2014 paper stated the government wanted to avoid. The incorporation rates of SLPs doubled between 2015 and 2016, [28] coinciding with the launch of the register. The incorporation spike raised concerns that SLPs were being used to avoid transparency. [29] Investigative journalists uncovered that SLPs were used to move at least GBP 4 billion out of the former Soviet Union as part of the Russian Laundromat money-laundering scheme over a four-year period. In addition, 70% of the SLPs that were incorporated between 2007 and 2016 were registered at 10 addresses, and in 2014, 20 SLPs were used to move over USD 1 billion from Moldovan banks. [30]

In 2016, the UK government consulted on its implementation of the European Union’s fourth AML Directive (AMLD4). [31] In it, the UK government recognised the need for “access to information on the ownership and control of a broad range of entities”, but stated that not “all legal entities must be subject to the requirements of the [AMLD4], particularly where there will be no transparency gain”. [32] To balance this, it outlined the rationale for the inclusion of certain types of entities and not others, including that “the entity must be incorporated, [meaning] the entity in question has ‘legal personality’”. [33]

Following this rationale, the UK government brought SLPs within the scope of its BOT regime in June 2017. [34] Subsequently, rates of SLP incorporation dropped in the last quarter of 2017 to levels 80% lower than at the end of 2015. [35] However, the rationale excluded ELPs and NILPs, as they did not have separate legal personalities. The media has since reported on similar patterns that point to the potential abuse of ELPs and NILPs. There is evidence of ELPs being set up and even advertised to obscure ownership, and of their repeated involvement with suspicious corporate structures. [36]

Following consultations in 2018 [37] and 2019, [38] the UK again started legislating for reforms to its BO disclosure regime through the Economic Crime and Corporate Transparency Bill, and the question of the scope of the register and LPs featured. In a February 2022 white paper outlining its plans, the government acknowledges allegations that the FinCEN Files provide evidence that UK LPs have been set up for suspicious purposes, and proposes that general partners provide “at least one verified natural person”, but fall short of including them within the scope of BO disclosures. [39] In a January 2023 factsheet, the government explains that “LPs registered in England and Wales or in Northern Ireland are not legally separate from their partners and so they can’t be beneficially owned”; the government will require them to “submit fuller information about their partners and statements confirming the accuracy of the information”. [40]

NILPs and ELPs’ continued exclusion therefore stems in part from the UK definition of a beneficial owner (or “person with significant control” (PSC)), which focuses on the ownership of shares, voting rights, powers over board members, and the right to influence and control. [41] Following this narrower definition, an LP without a distinct legal personality cannot be beneficially owned. However, more comprehensive definitions of beneficial ownership in other countries include being able to derive (economic) benefit or profits from a corporate vehicle. [42] Under these definitions, LPs without a legal personality can be beneficially owned since both general and limited partners can derive significant profits through the arrangement. Additionally, LPs may operate in a very similar way as a trust in cases where the general partner holds assets for the partnership on trust. Some argue that most ELPs ought to register with the UK’s Trust Registration Service. [43] International standards and the UK itself consider all parties to a trust to be its beneficial owners.

Another consideration is that the UK has a broader definition of beneficial ownership in its AML regulations for the purposes of obliged entities conducting Know Your Customer (KYC) checks as part of customer due diligence (CDD) and, such that an LP can be beneficially owned in the eyes of a bank conducting CDD. [44] This impacts the effectiveness of the UK’s discrepancy reporting requirement, in which obliged entities are required to submit reports of discrepancies between the outcome of who they determine to be a beneficial owner of a corporate vehicle through KYC investigations and what is listed on the register. The requirement excludes LPs, presumably to avoid receiving extraneous reports. [45] Industry experts report that in many jurisdictions with similar requirements, discrepancy reports often stem from differences in definitions between AML regulations and those of the BO disclosure regime. [46] Applying the same definition to BO reporting as CDD requirements would facilitate compliance by being easier to understand, and would ensure discrepancy reporting has the potential to improve the quality of information on more corporate vehicles.

Whilst LPs remain excluded from BO disclosure requirements, the UK government is introducing reforms which will mean that although LPs can have a principal place of business abroad, they must maintain a registered office address in the UK. The legislation will also require more information on partners, such as their residential address, date of birth, nationality, and business occupation. There will also be a requirement for individuals to keep this information up to date. It is unclear, however, how this will apply in the numerous instances where both general and limited partners are offshore corporate vehicles. [47] There are also proposals to give the registrar the power to expand discrepancy reporting requirements, to query information, and ensure that documents received are accurate. LPs will be required to deliver certain documents via an Authorised Corporate Service Provider who will be subject to AML supervision.

Foreign and rarely-used corporate vehicles

In an AML/CFT policy context, the FATF requires jurisdictions to collect the BO information of foreign legal persons with a “sufficient link” to their country, as well as legal arrangements created under foreign legislation of which the trustees are resident in the jurisdiction. [48] A comprehensive approach to coverage should also consider coverage of foreign corporate vehicles, particularly where the jurisdiction of incorporation does not have disclosure requirements in place. This includes foreign trusts owning assets or carrying out business in, or being administered from a jurisdiction.

There are already examples of disclosure requirements for foreign corporate vehicles. Following Russia’s invasion of Ukraine in 2022, the UK established the Register of Overseas Entities (ROE), requiring foreign companies that want to own, buy, sell, or transfer property in the UK to report their beneficial owners or managing officers. [49] At the time of writing, Japan is considering a similar measure for the purposes of sanctions compliance and national security, [50] though it has no commitment to establishing a central BO register for domestic corporate vehicles. Russia has a register for foreign legal entities and structures that are registered for tax purposes in Russia to annually disclose beneficial ownership. [51]

In addition, jurisdictions may need to collect information on foreign corporate vehicles that appear in a reporting entity’s ownership chain. Disclosure regimes should collect sufficient detail to have a complete and auditable record, as discussed later. [52] Those implementing reforms will need to consider how and where to collect, store, and ensure the accuracy of this information, especially given the challenge around verifying foreign corporate vehicles. An increasing number of jurisdictions collect BO information on domestic corporate vehicles. Provided this is done to a certain standard, efficient international exchange of information on domestic corporate vehicles may serve as a more reliable alternative to the collection of information on foreign corporate vehicles in the longer term.

Furthermore, some jurisdictions may have rarely used or unique forms of corporate vehicles. For example, an Anstalt (establishment) is a corporate form unique to Liechtenstein and covered by its BO regime. [53] The Anstalt has been used for money laundering (e.g. in the Philippines), [54] and its misuse far outside its country of origin again highlights a limitation of the risk-based approach, as discussed above. This reinforces the importance of ensuring that the starting point for coverage is broad, and any exemptions are context specific and well justified.

Domestic authorities are in a better position to understand the ownership and control of corporate vehicles. Therefore, placing disclosure requirements on corporate vehicles in the country of origin may lead to more reliable BO information. From a global perspective, it is neither an effective nor logical solution for jurisdictions to have to impose disclosure requirements for foreign corporate vehicles that pose a risk in a situation where they are not subject to disclosure requirements in their own jurisdiction because their risk domestically is low. Rather, in the longer term, it will be easier for the jurisdiction under whose domestic laws the entity is created to collect and verify information, and to exchange this with other jurisdictions.

Challenges specific to state-owned enterprises and not-for-profit organisations

State-owned-enterprises (SOEs) and not-for-profit organisations (NPOs) are two categories of corporate vehicle that are sometimes given blanket exclusions from reporting requirements, despite being highly relevant to achieving BOT policy aims. They take a variety of legal forms, and often have a specific function of operating, at least in part, for public or social benefit. SOEs are defined as being “under the control of the state, either by the state being the ultimate beneficial owner of the majority of voting shares or otherwise exercising an equivalent degree of control”. [55] Transparency about how SOEs are owned and controlled is essential in order to help avoid risks, including misuse of assets, unfair competition, skewed procurement, and corruption, [56] and it has received particular attention within extractive industries. [57] As such, international bodies, including the Organisation for Economic Co-operation and Development (OECD), stress that SOEs should observe high standards of transparency relating to information about how they are managed. [58]

Similarly, there is evidence of misuse of NPOs, [59] and the Egmont Group notes the abuse of NPOs for money laundering. [60] Civil society actors have raised concerns about the potential for BO disclosures and AML/CFT policies more broadly having unintended consequences. [61] These risks, as well as any existing transparency and reporting requirements for NPOs, should be accounted for to ensure BO disclosure requirements are proportionate and do not place an undue burden on NPOs compared with other categories of corporate vehicles. In a number of jurisdictions civil society has voiced concerns about, and opposed, disclosure requirements for NPOs. Further research is needed to fully understand the impact of BOT on NPOs.

While the purpose and structure of these corporate vehicles may make it more challenging to apply standard definitions of beneficial ownership, it is nevertheless important to capture ownership and control information about these corporate vehicles. Using such an approach supports the legibility of the regime by applying the same standards and requirements to all corporate vehicles. Albania, for example, requires “non-profit organizations, including foundations, associations, centers, as well as branches of foreign non-profit organizations” to disclose BO information to the country’s central BO register. [62]

Determining reasonable exemptions

After determining which corporate vehicles to cover in the scope of BO disclosure, policymakers should provide clarity on which, if any, corporate vehicles that are relevant to the jurisdiction’s policy aims should be provided an exemption from the full disclosure requirements. As discussed in more detail later, exemptions should not remove all requirements to make a filing to the BO register. [63]

The main criteria for reasonable, narrowly tailored exemptions are:

certain corporate vehicles are already disclosing adequate and up-to-date information on ownership and control to a third-party body that is regulated or subject to supervision, and that maintains and performs reporting and oversight;
the information that is being disclosed to a third-party body is as easily accessible to all relevant data user groups as it would be through a government register; [64] and
complying with disclosure requirements is impossible or excessively difficult for certain corporate vehicles; this is typically because ownership and control are highly distributed and undergo rapid changes, often facilitated by regulated intermediaries.

Consider the creation of exemptions over exclusions

The primary purpose of exemptions should be to help ensure that the requirements placed on individuals and corporate vehicles by laws and regulations setting out the scope of a regime are reasonable and proportionate to achieving a jurisdiction’s policy aims. To facilitate compliance, it may be necessary to consider additional legislation (e.g. legislation governing CDD/KYC requirements for obliged entities) to ensure a harmonised approach in both coverage and definitions (see Box 3).

Exemption refers to placing specific, minimised disclosure requirements on corporate vehicles that meet the criteria for inclusion in the scope of disclosure. By contrast, corporate vehicles that do not meet these criteria or are not explicitly named may be completely excluded from requirements. Excluding categories of corporate vehicles from a disclosure regime can introduce loopholes, and lawmakers should consider establishing a broad scope of coverage of all corporate vehicles and providing reasonable exemptions instead.

Box 3: Exemptions in the Netherlands

The Netherlands implemented BOT to prevent money laundering and terrorism financing in line with the AMLD4. Included in the exemptions are a number of historical entities that have existed since before the introduction of the Civil Code in 1838, such as guilds. They therefore do not appear in the legislation that states which entities possess a distinct legal personality, which includes associations. [65] They are, however, covered by the 2007 company register legislation under “other legal entities under private law”. [66] If the historical entity wants to engage in commercial activities, it has to register with the company registrar. [67]

As a justification for the exemption, the Dutch government published a statement that on 1 May 2018 there were 87 “other legal entities under private law” registered with the company registrar. Because there are very limited numbers and new legal entities of this kind can no longer be incorporated, the government stated there was reason to assume these legal entities posed a low risk for AML/CFT purposes. [68] As there was no further detail, and given the small number of entities involved, this perception of risk appears to be in relative terms rather than for each specific entity, for which the risk remains potentially higher as a result of their exemption.

An additional exemption is made for the Vereniging van Eigenaren (VvE), the apartment owners’ associations. A VvE manages its apartment building and deals with communal interests and spaces. When buying an apartment, the deed holder automatically becomes a member of a VvE, which cannot be rescinded until the property is sold. VvEs are bound by Dutch laws and regulations, [69] and they have a separate legal personality. Every VvE is required by law to be registered with the company registrar, which collects personal information about the director(s) [70] who execute the memberships’ decisions.

The justification for their exemption is that VvEs “do not fit well with the scope of the [AMLD4]” and that “all owners with an apartment right are automatically members and the association’s sole purpose is maintenance of the property”. [71] There is no comment on the extent to which they pose a risk for AML/CFT. However, there appear to be few publicly documented cases of VvEs being used for money laundering. By contrast, there are numerous documented cases of VvEs and fraud, a predicate crime for money laundering. [72]

Although VvEs are exempt from the BO regime, obliged entities are not exempt from establishing their beneficial ownership as part of CDD/KYC obligations under Dutch AML regulations. Article 3 of the implementation order guides obliged entities on how to ascertain the beneficial owners of “other legal entities”, which includes associations. This includes:

direct or indirect ownership of more than 25% of shares of the legal entity;
direct or indirect ability to exercise more than 25% of the votes with respect to changing the statutes of the legal entity; and
exercising effective control of the legal entity. [73]

If none of the criteria are satisfied, a person on whose behalf the transaction is conducted, or another senior manager, should be disclosed. For VvEs, this would be the director(s), whose information the registrar should already have.

The argument can be made that VvEs rarely have beneficial owners: the first two criteria are not applicable, as there is no ownership share and the VvE form of association does not have statutes. The third criteria on effective control is unlikely to be applicable in most cases, but is not impossible. Therefore, according to the AML regulations, VvEs can have a beneficial owner who is different from the director who already needs to provide their information upon registration. It now appears that banks and insurers are putting pressure on VvEs to supply information and documentation for establishing their beneficial ownership. Some banks, such as ING, have set up dedicated pages for VvEs [74] and forms which seem to define beneficial ownership of VvEs in a different way from the implementation order, for example by defining beneficial owners as those with more than 25% voting rights at VvE meetings. [75]

This unharmonised approach has led to reports of VvEs not being able to open bank accounts or having their accounts closed on the grounds of posing a money laundering risk. [76] Whilst exemptions are often made to reduce the burden on specific entities and individuals, in this case they have led to an incoherent approach that has the opposite effect. There is no legal requirement for individuals to cooperate and comply with KYC investigations, but a VvE not doing so would result in the closure of its bank account, to the disadvantage of its members. [77] Governments could shoulder some of this burden by collecting disclosures from VvEs, which would then allow them to benefit from verification and discrepancy reporting from obliged entities. From public information alone, it is unclear how this affects and potentially undermines the possible benefits of discrepancy reporting, which does not appear to make any exceptions for VvEs. [78]

Some could argue that AML-regulated entities should be relieved of the requirement to conduct CDD/KYC on VvEs. However, this would leave a loophole with potential unintended consequences. If VvEs were required to disclose their BO information, it would invite discussion about who has access to such information; limiting access to this BO information may be reasonable given the fact that individuals have no choice as to whether they join a VvE.

Consider whether exemptions for publicly listed companies and investment funds are reasonable

A listed company means any company that has equity publicly traded on a regulated market. Publicly listed companies (PLCs) are an example of a category of corporate vehicles that are often included in the scope of disclosure requirements because they are relevant to the regime’s policy aims, but are exempt from full BO disclosure under certain conditions. For example, French companies with shares traded on a regulated market, defined as stock exchanges in the European Economic Area, are exempt from declarations to the French BO register. This is because they are subject to obligations to publish certain information in accordance with EU law and to international standards guaranteeing adequate transparency of information relating to the ownership of capital. [79]

Stock exchanges mediate the sale of securities, including shares in PLCs. Shares traded through exchanges are often held by intermediaries (e.g. stock brokers) and pooled investment vehicles (e.g. mutual funds), and their ownership can be highly distributed and subject to rapid change. It can therefore be nearly impossible for many PLCs to maintain a clear, real-time picture of aggregate ownership by any one individual that would constitute beneficial ownership.

As a result, PLCs may be granted an exemption from standard BO disclosure requirements, provided they are listed on a stock exchange with disclosure requirements relating to the acquisition and disposal of significant shareholdings and voting rights. The simplest and clearest approach to defining which listed companies are exempt is to create a list of stock exchanges that have adequate ownership disclosure policies and use this as a basis for PLC exemptions (see Box 4). Some information should be collected from exempt PLCs, including the basis for their exemption and a link to their exchange listing, as discussed below. [80] Other oversight and due diligence requirements may also be considered. For example, it is common for AML/CFT regimes to distribute some level of due diligence regarding public company ownership to brokers or other intermediaries, albeit often imperfectly.

Box 4: Establishing the basis for reasonable exemptions for publicly listed companies [81]

To establish exemptions for PLCs, policymakers should develop a list of stock exchanges that require the disclosure of sufficient information about the ownership and control of PLCs. These should include:

timely notification on the acquisition and disposal of significant voting rights;
notifications on the basis of aggregated holdings and interests used jointly via an agreement;
notifications of ownership and control arrangements via financial instruments that have a similar effect to owning shares or controlling votes;
notifications that contain information on the means through which major shareholding or voting rights are exercised (e.g. the chain of ownership); and
notifications of interests held by company officers.

Policymakers should also give consideration as to whether this information is easily accessible and up to date, and in what format it is available.

Finally, policymakers should consider the accessibility and structure of information on a stock exchange and whether these vary between segments, as different requirements may apply. [82] For instance, Argentina’s tax authority, which maintains a central BO register with access granted only to government users, has opted not to allow exemptions for PLCs in their BO register. This is because, in many cases, a special authentication process is required to use the stock exchange portal that publishes the material, and the information is in formats that are not compatible with those used by their databases. [83] This example illustrates the importance of ensuring the information that is being disclosed to a qualifying third-party body is easily accessible to all relevant data users when determining whether this alternative mode of disclosure is a justifiable basis for a reasonable exemption.

Investment funds are another category of corporate vehicle that has been exempt or excluded from the scope of BO disclosures in many jurisdictions. Investment funds refer to “any type of collective scheme that pools together money from different investors to invest in different types of assets, as described in the prospectus or other fund documents”. [84] There are significant practical challenges to ensuring transparency in investment funds, such as the high-speed trading of securities, which may be held for as little as a few seconds. Investment funds are also typically subject to AML/CFT regulations. [85]

However, the increasingly documented use of investment funds for money laundering undermines the case for their exemption, particularly for alternative investment funds or private investment funds, such as hedge funds and private equity funds, which are typically only accessible to high-net-worth individuals or professional investors (see Box 5). Civil society organisations have proposed means by which BOT may be strengthened in the investment industry. [86] Further research is needed to concretely establish whether and how BO disclosure requirements can effectively include investment funds to generate useful information.

Box 5: Money laundering risks in investment funds

The Netherlands’ 2019 National Risk Assessment on Money Laundering identifies investment institutions/companies among the 15 greatest money laundering threats, along with legal entities, offshore companies, and structures created by trust service providers. The report describes money laundering via investment institutions/companies as having a “future” character. This is because, whilst experts believe that it is already occurring, there appears to be little knowledge or information about this money laundering method. [87]

The report noted that the greatest risk is expected to lie with investment institutions/companies that are unlicensed, foreign-based, or both. Of particular concern in the Netherlands are alternative investment funds, which can include hedge funds and private equity funds, and which are subject to lighter regulation than institutes for collective investments in securities. [88] Similarly, a leaked investigation bulletin prepared by the US Federal Bureau of Investigation highlights concerns that “threat actors”, including “financially motivated criminals and foreign adversaries”, are likely using private fund structures “… to launder money, circumventing traditional [AML] programs”, and points to the limitations of AML compliance programs within the US private funds industry. [89]

The US Corporate Transparency Act (CTA) passed in January 2021 may partially curb this threat by requiring certain unregistered pooled investment vehicles which are not operated or advised by an investment adviser registered with the Securities and Exchange Commission (SEC), or otherwise subject to certain SEC reporting requirements, to report limited BO information to a central directory managed by FinCEN. This rule may even apply to certain pooled investment vehicles managed by investment advisers exempt from SEC registration. [90] Notably, however, those pooled investment vehicles that are private investment funds and managed by SEC registered investment advisers (or SEC reporting investment advisers) may not be subject to any form of BO reporting, and other exemptions under the CTA may limit BO disclosure for a variety of private pooled investment vehicles. [91]

Finally, there have been several documented cases of misuse of private investment funds established in countries in Latin America, often involving the US and Canada as destination countries for illicit financial flows. [92] For example, in Brazil, the region’s largest private investment market, the use of a form of private fund called family office has grown significantly since the 1990s, particularly for investment abroad. Family offices are relatively unregulated, whether they are headquartered in Brazil or abroad, and have reportedly been used to hide the proceeds of corruption.

Notes

[9] Van der Does de Willebois et al.,The Puppet Masters, 165.

[10] Ramandeep Kaur Chhina, An introduction to trusts (s.l.: Open Ownership, 2021), https://www.openownership.org/en/publications/an-introduction-to-trusts; Julia Kagan, “What Is a Legal Trust? Common Purposes, Types, and Structures”, Investopedia, 17 December 2022, https://www.investopedia.com/terms/t/trust.asp.

[11] See: Chhina, An introduction to trusts.

[12] For example, trusts are treated like legal persons in contractual relations, various aspects of taxation, and estate planning, despite the theoretical assertion that trusts are not legal persons. See: P.A. Olivier, S. Strydom, and G.P.J. van den Berg, Trust Law and Practice (Durban: LexisNexis South Africa, 2021); and Johann Krige and Anneke Wolmarans, An introduction to trusts in South Africa: A beneficial ownership perspective (s.l.: Open Ownership, 2022), https://www.openownership.org/en/publications/an-introduction-to-trusts-in-south-africa/.

[13] Federal Ministry of Finance, Republic of Austria, “Federal Act on the establishment of a register of beneficial owners of companies, other legal entities and trusts (Beneficial Owners Register Act – WiEReG; Wirtschaftliche Eigentümer Registergesetz)”, Article 1 (2), Federal Law Gazette 1, no. 136 (2017): 1-2, https://www.bmf.gv.at/en/topics/financial-sector/beneficial-owners-register-act/legal-basis-and-FAQ.html.

[14] FATF, The FATF Recommendations, 127.

[15] Recommendation 24 applies to legal persons, which the FATF defines as “any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property”. Trusts and similar legal arrangements are covered by Recommendation 25, with less-strict requirements. See: FATF, The FATF Recommendations, 97, 127.

[16] Recommendation 25 has recently been revised, but does not require the disclosure of beneficial ownership of trusts to a central register. See: FATF, Outcomes FATF Plenary, 22-24 February 2023 (Paris: FATF, 2023), https://www.fatf-gafi.org/en/publications/Fatfgeneral/outcomes-fatf-plenary-february-2023.html.

[17] FATF and Egmont Group, Concealment of Beneficial Ownership (Paris: FATF, 2018), https://www.fatf-gafi.org/en/publications/Methodsandtrends/Concealment-beneficial-ownership.html.

[18] Interview with Simon Bowers, Finance Uncovered, 13 January 2022.

[19] FATF, The FATF Recommendations, 10.

[20] Richard Berkhout and Francisca Fernando, eds., Unmasking Control: A Guide to Beneficial Ownership Transparency (Washington, D.C.: IMF, 2022), 11, https://www.imf.org/en/Publications/Books/Issues/2022/10/06/Unmasking-Control-A-Guide-to-Beneficial-Ownership-Transparency-517096.

[21] Berkhout and Fernando, Unmasking Control, 11.

[22] Evan Tarver, “Limited Partnership: What It Is, Pros and Cons, How to Form One”, Investopedia, 5 September 2022, https://www.investopedia.com/terms/l/limitedpartnership.asp.

[23] In a UK LP, “[u]nlike in a private company (where shareholders of the same class have to be treated equally), the partners can set the rules on matters such as how the profits are shared, how interests in the partnership are transferred and how the business is to be conducted”. See: BVCA, The importance of UK Limited Partnerships for Private Equity & Venture Capital (London: BVCA, 2018), 4, https://www.bvca.co.uk/Portals/0/Documents/Policy/Technical%20Publications/180822%20UK%20LP-PE%20brief%20(web%20version).pdf?ver=2018-08-22-160016-000.

[24] Department for Business, Innovation & Skills (BIS), UK government, Company ownership: transparency and trust discussion paper (London: BIS, 2014), https://www.gov.uk/government/consultations/company-ownership-transparency-and-trust-discussion-paper.

[25] BIS, UK government, Transparency & Trust: Enhancing the Transparency of UK Company Ownership and Increasing Trust in UK Business – Discussion Paper (London: BIS, 2014), 12, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/212079/bis-13-959-transparency-and-trust-enhancing-the-transparency-of-uk-company-ownership-and-increaing-trust-in-uk-business.pdf.

[26] BIS, UK government, Transparency & Trust: Enhancing the Transparency of UK Company Ownership and Increasing Trust in UK Business – Government Response (London: BIS, 2014), 23, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/304297/bis-14-672-transparency-and-trust-consultation-response.pdf.

[27] BIS, Transparency & Trust – Government Response, 22-23.

[28] Global Witness, The Companies We Keep: What the UK’s Open Data Register Actually Tells Us About Company Ownership (s.l.: Global Witness, 2018), 10, https://www.globalwitness.org/documents/19400/Briefing_The_Companies_We_Keep.pdf.

[29] Gemma Cartin, Offshore in the UK: Analysing the use of Scottish Limited Partnerships in corruption and money laundering (s.l.: Transparency International UK, 2017), https://www.transparency.org.uk/sites/default/files/pdf/publications/Offshore_In_The_UK_TIUK_June_2017.pdf.

[30] Jaccy Gascoyne, “The Use of Scottish Limited Partnerships in Money laundering Schemes”, MLROs.com, n.d., https://mlros.com/the-use-of-scottish-limited-partnerships-in-money-laundering-schemes/; David Leask and Richard Smith, “Scots shell companies used to launder £4 billion out of Russia”, The Herald, 27 March 2017, https://www.heraldscotland.com/news/15183346.scots-shell-companies-used-to-launder-4-billion-out-of-russia/.

[31] BIS, UK government, Implementing the Fourth Money Laundering Directive: beneficial ownership register (London: BIS, 2016), https://www.gov.uk/government/consultations/implementing-the-fourth-money-laundering-directive-beneficial-ownership-register.

[32] BIS, UK government, Implementation of the Fourth Money Laundering Directive (London: BIS, 2016), 16, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/565095/beis-16-38-4th-money-laundering-directive-transposition-discussion-paper.pdf.

[33] BIS, Implementation of the Fourth Money Laundering Directive, 16.

[34] “Hard Data on Lessons Learned from the UK Beneficial Ownership Register”, Global Witness, 30 May 2019, https://www.globalwitness.org/documents/19733/GW.Fact_Sheet_on_UK_Register_Data_for_US.May302019_w0hQoid.pdf.

[35] “Hard Data on Lessons Learned from the UK Beneficial Ownership Register”, Global Witness.

[36] For example, see: Simon Bowers, Purity Mukami, and Leila Haddou, “Exposed: How Russia-facing company formation agents took over the darkest corners of corporate Britain”, Finance Uncovered, 2 August 2022, https://www.financeuncovered.org/stories/english-limited-partnerships-secrecy-formation-agencies-ios-las-lotus-comform-corruption; James Oliver, Nassos Stylianou, Will Dahlgreen, and Steve Swann, “Banned Russian oligarchs exploited UK secrecy loophole”, BBC News, 3 August 2022, https://www.bbc.com/news/uk-62410715.

[37] BIS, UK government, Limited partnerships: reform of limited partnership law (London: BIS, 2018), https://www.gov.uk/government/consultations/limited-partnerships-reform-of-limited-partnership-law.

[38] BIS, UK government, Corporate Transparency and Register Reform: Government response to the consultation on options to enhance the role of Companies House and increase the transparency of UK corporate entities (London: BIS, 2020), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/925059/corporate-transparency-register-reform-government-response.pdf.

[39] BIS, UK government, Corporate Transparency and Register Reform White Paper: Policy overview and response to final consultations (London: BIS, 2022), 18, 71, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1060726/corporate-transparency-white-paper.pdf.

[40] “Factsheet: limited partnerships”, UK Home Office, Department for Business and Trade, HM Treasury, Ministry of Justice, Serious Fraud Office, and Department for Business, Energy & Industrial Strategy, 18 January 2023, https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-bill-2022-factsheets/fact-sheet-limited-partnerships.

[41] “Companies Act 2006 – Schedule 1A”, UK legislation, last updated 2017, https://www.legislation.gov.uk/ukpga/2006/46/schedule/1A.

[42] For example, definitions in the Netherlands, Slovakia, and the United States all do so. See: Network of Experts on Beneficial Ownership Transparency (NEBOT), “The Beneficial Ownership Definition for Companies”, 4 (forthcoming).

[43] “Fund managers may urgently need to register express trusts with HMRC”, Osborne Clarke, 23 August 2022, https://www.osborneclarke.com/insights/fund-managers-may-urgently-need-register-express-trusts-hmrc.

[44] “The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 – Regulation 5”, UK legislation, 2017, https://www.legislation.gov.uk/uksi/2017/692/regulation/5/made.

[45] “Report a discrepancy about a beneficial owner on the PSC register”, Companies House, UK government, updated 2 November 2022, https://www.gov.uk/guidance/report-a-discrepancy-about-a-beneficial-owner-on-the-psc-register-by-an-obliged-entity.

[46] FATF Focused Consultation Sessions, 20-21 July 2022; and NEBOT, “The Beneficial Ownership Definition for Companies”.

[47] See, for example: Graham Barrow (@greybrow53), “Sidney Transit LP is a Northern Irish Limited Partnership and like Wiltron has no legal personality. Here’s its partners:”, Twitter, text and image, 25 July 2018, https://twitter.com/greybrow53/status/1022210182452060160.

[48] Under FATF Recommendation 24, entities with sufficient links should be required to disclose BO information. The definition of what constitutes a sufficient link varies by jurisdiction, but may include when a company: has a permanent establishment, branch, or agency in a country; carries out significant business activity or has significant and ongoing business relations with financial institutions or financial service providers; has significant real estate or other local investments; employs staff; is a tax resident; or has significant management duties (e.g. as a trustee). See: FATF, The FATF Recommendations, 91.

[49] “Register an overseas entity and tell us about its beneficial owners”, Companies House, UK government, updated 31 January 2023, https://www.gov.uk/guidance/register-an-overseas-entity.

[50] Julian Ryall, “Japan to track land sales near army bases amid China, Russia, North Korea spying fears”, South China Morning Post, 8 November 2022, https://www.scmp.com/week-asia/politics/article/3198734/japan-track-land-sales-near-army-bases-amid-china-russia-north-korea-spying-fears.

[51] Orbitax, “Russia Introduces New Beneficial Ownership Reporting Disclosure Requirements for Foreign Organizations”, 13 May 2021, https://www.orbitax.com/news/archive.php/Russia-Introduces-New-Benefici-46341.

[52] For more information about the collection of information on ownership chains, see: Open Ownership, Principles for effective beneficial ownership disclosure – Detail (s.l.: Open Ownership, 2023), https://www.openownership.org/en/principles/detail/.

[53] Stolen Asset Recovery Initiative, Guide to Beneficial Ownership Information in Liechtenstein: Legal Entities and Legal Arrangements (s.l.: The World Bank and the United Nations Office on Drugs and Crime, 2018), https://star.worldbank.org/sites/star/files/liechtenstein_bo_guide_-_updated_sept_2018_-_final.pdf.

[54] Van der Does de Willebois et al., The Puppet Masters, 48.

[55] OECD, Recommendation of the Council on Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises (s.l.: OECD, 2019), https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0451.

[56] Stephen Abbott Pugh and Emma Howard, Defining and capturing data on the ownership and control of state-owned enterprises (s.l.: Open Ownership, 2023), https://www.openownership.org/en/publications/defining-and-capturing-data-on-the-ownership-and-control-of-state-owned-enterprises/.

[57] For example, the Natural Resource Governance Institute (NRGI) recommends and offers guidance on how SOEs disclose their beneficial owners. See: Alexandra Gillies and Tom Shipley, Anticorruption Guidance for Partners of State-Owned Enterprises: Full Guidance (s.l.: NRGI, 2022), 63, https://soe-anticorruption.resourcegovernance.org/files/anticorruption_guidance_for_partners_state_owned_enterprises.pdf.

[58] “Anti-Corruption and Integrity in State-Owned Enterprises”, OECD, n.d., https://www.oecd.org/corporate/Anti-Corruption-Integrity-Guidelines-for-SOEs.htm.

[59] For example, see: Anti-Money Laundering Council, Philippines Risk Assessment of the Non-Profit Organization (NPO) Sector (s.l.: AntiMoney Laundering Council, 2018), 4, http://www.amlc.gov.ph/images/PDFs/NPO%20Risk%20Assessment.pdf; and “Terrorist financing and the non-profit sector: the case for deepening dialogue and cooperation”, EU AML/CFT Global Facility, 4 May 2021, https://www.global-amlcft.eu/terrorist-financing-and-the-non-profit-sector-the-case-for-deepening-dialogue-and-cooperation/.

[60] Egmont Group Secretariat, Best Egmont Cases: Financial Analysis Cases 2014–2020 (s.l.: Egmont Group of Financial Intelligence Units, 2021, https://egmontgroup.org/wp-content/uploads/2022/01/2021-Financial.Analysis.Cases_.2014-2020-3.pdf.

[61] For example, see: “Article - Derisking and Civil Society: Drivers, Impact and Solutions”, Human Security Collective, n.d., https://www.hscollective.org/news/timeline/article-derisking-and-civil-society-drivers-impact-and-solutions/?acceptCookies=6401eeb0d550c; and Sofia Menchu, “Guatemala detains renowned journalist on money laundering, blackmail allegations”, Reuters, 30 July 2022, https://www.reuters.com/world/americas/guatemala-detains-renowned-journalist-money-laundering-blackmail-allegations-2022-07-30/.

[62] The Parliament of the Republic of Albania, “Law no. 112/2020 for the Register of Beneficiary Owners – Pursuant to Articles 78 and 83, point 1, of the Constitution, on the proposal of the Council of Ministers”, Official Journal no. 149 (2020): 9447, https://qkb.gov.al/media/38115/fz-2020-149-f.pdf.

[63] Ensuring that some data is captured on exempt entities is critical to having a complete and auditable record of historical BO information that can be accessed, used, and easily interpreted by users such as law enforcement. See: Kadie Armstrong, Building an auditable record of beneficial ownership (s.l.: Open Ownership, 2022), https://www.openownership.org/en/publications/building-an-auditable-record-of-beneficial-ownership/.

[64] For the purposes of this briefing, corporate vehicles that are already indirectly disclosing their beneficial ownership (for example, if they are 100% owned and controlled by a parent corporate vehicle which is subject to the same disclosure requirements and already disclosing their beneficial ownership) are not considered exemptions. These corporate vehicles may be able to include less information in their declarations to lower the compliance burden and avoid redundancy. See: Open Ownership, Principles for effective beneficial ownership disclosure – Detail.

[65] Burgerlijk Wetboek Boek 2, Government of the Netherlands, Article 2 and 3, https://wetten.overheid.nl/BWBR0003045/2022-11-04/#Boek2_Titeldeel1_Artikel2.

[66] Handelsregisterwet 2007, Government of the Netherlands, Article 6, https://wetten.overheid.nl/BWBR0021777/2022-10-25/#Hoofdstuk2_Paragraaf2.2_Artikel6.

[67] “Inschrijven overige privaatrechtelijke rechtspersoon”, Kamer van Koophandel (KVK), n.d., https://www.kvk.nl/inschrijven-en-wijzigen/inschrijven-onderneming-overige-privaatrechtelijke-rechtspersoon/.

[68] Kamerstuk – 35179 nr. 3, House of Representatives of the States General of the Netherlands, 4 April 2019, https://zoek.officielebekendmakingen.nl/kst-35179-3.html#ID-878675-d36e495.

[69] “Wat houdt een vereniging van eigenaren (vve) in?”, Government of the Netherlands, n.d., https://www.rijksoverheid.nl/onderwerpen/huis-kopen/vraag-en-antwoord/wat-houdt-een-vereniging-van-eigenaars-vve-in.

[70] “Inschrijven Vereniging van Eigenaars”, KVK, n.d., https://www.kvk.nl/inschrijven-en-wijzigen/inschrijven-vereniging-van-eigenaars/; “22 Inschrijving: Functionaris voor een stichting, vereniging of vereniging van eigenaars zonder onderneming”, KVK, 2020, https://www.kvk.nl/download/Formulier-22-inschrijving-functionaris-vereniging-of-stichting_tcm109-365602.pdf.

[71] House of Representatives of the States General, “Kamerstuk – 35179 nr. 3”.

[72] “Fraude in VvE’s; veel voorkomend maar wel te voorkomen”, Nederlandvve.nl, 22 January 2014, https://www.nederlandvve.nl/vve-nieuws/vve-fraude/.

[73] Uitvoeringsbesluit Wwft 2018, Government of the Netherlands, Article 3, https://wetten.overheid.nl/BWBR0041193/2022-11-01/#Paragraaf2_Artikel3.

[74] “Verklaring Uiteindelijk Belanghebbenden Vereniging van Eigenaren”, ING, n.d., https://assets.ing.com/m/722869d2afb57392/original/verklaring_ubo_vereniging_van_eigenaren.pdf.

[75] This includes any person who has more than 25% of voting rights in members’ meetings rather than with respect to the changing of statutes of the association, as stated in the order: “Verklaring Uiteindelijk Belanghebbenden Vereniging van Eigenaren”, ING, n.d., https://www.ing.nl/media/2.%20UBO%20VVE%20verklaring_tcm162-216839.pdf.

[76] “VvE-Belang: VvE’s zijn de dupe van de strijd van banken tegen witwassen”, Vastgoed Business School, 31 October 2019, https://www.vastgoedbs.nl/nieuws/vve-belang-vves-dupe-strijd-banken-witwassen/.

[77] See, for example: “VvE Belang: banken blokkeren rekening van VvE’s”, Nederlandvve.nl, 5 November 2019, https://www.nederlandvve.nl/vve-nieuws/banken-blokkeren-rekening-vve/.

[78] Wet ter voorkoming van witwassen en financieren van terrorisme 2022, Government of the Netherlands, Article 10a, https://wetten.overheid.nl/BWBR0024282/2022-11-01/#Hoofdstuk2_Paragraaf2.4a_Artikel10a.

[79] Conseil National des Greffiers des Tribunaux de Commerce, “Schémas pour identifier les BE”, 31 March 2020, 20, https://www.infogreffe.fr/documents/20126/0/Sch%C3%A9mas+pour+identifier+les+BE+-+31+03+2020.pdf.

[80] The EITI offers an example of this approach: “Publicly listed companies, including wholly-owned subsidiaries, are required to disclose the name of the stock exchange and include a link to the stock exchange filings where they are listed”. See: EITI, EITI Requirements – Requirement 2.5 (Oslo: EITI, 2019), https://eiti.org/eiti-requirements.

[81] Kadie Armstrong and Jack Lord, Beneficial ownership transparency and listed companies (s.l.: Open Ownership, 2020), https://www.openownership.org/en/publications/beneficial-ownership-transparency-and-listed-companies/.

[82] See: “How to list equity”, London Stock Exchange, n.d., https://www.londonstockexchange.com/raise-finance/equity/how-list-equity-listing-journey.

[83] Oscar Ramos Rivera, Argentina: Scoping study (s.l.: EITI and Open Ownership, 2023), https://www.openownership.org/en/publications/argentina-scoping-study/.

[84] Andres Knobel, Beneficial ownership in the investment industry: A strategy to roll back anonymous capital (s.l.: Tax Justice Network, 2019), 11, https://www.taxjustice.net/wp-content/uploads/2019/10/The-transparency-risks-of-investment-entities-working-paper-Tax-Justice-Network-Oct-2019.pdf.

[85] Lakshmi Kumar, Private Investment Funds in Latin America: Money Laundering and Corruption Risks (s.l.: Global Financial Integrity, 2022), https://gfintegrity.org/wp-content/uploads/2022/12/GFI-PIF-in-LatAm-Report.pdf.

[86] For example, see: Knobel, Beneficial ownership in the investment industry.

[87] H.C.J. van der Veen and L.F. Heuts, Dutch National Risk Assessment on Money Laundering 2019 – 2020-11a Report (s.l.: Wetenschappelijk Onderzoek- en Documentatiecentrum, 2020), https://repository.wodc.nl/bitstream/handle/20.500.12832/3105/Cahier-2020-11a-full_text.pdf?sequence=1&isAllowed=y.

[88] Tom Debets and Lisette de Zeeuw, “Private investment funds and money laundering”, Anti Money Laundering Centre, 1 July 2021, https://www.amlc.eu/private-investment-funds-and-money-laundering/.

[89] Shae Armstrong and Jennifer Commander, “ACFCS Exclusive Contributor Report: The Corporate Transparency Act Introduces Beneficial Ownership Disclosure Requirements for Investment Funds”, Association of Certified Financial Crime Specialists, 21 June 2021, https://www.acfcs.org/acfcs-exclusive-contributor-report-the-corporate-transparency-act-introduces-beneficial-ownership-disclosure-requirements-for-investment-funds/.

[90] Armstrong and Commander, “ACFCS Exclusive Contributor Report”.

[91] Ian Gary, Erica Hanichak, and Ryan Gurule, “FACT Submits Comment to the SEC to Amend Form PF and Secure the U.S. Financial System”, FACT Coalition, 22 March 2022, https://thefactcoalition.org/fact-submits-comment-to-the-sec-to-amend-form-pf-and-secure-the-u-s-financial-system/.

[92] Kumar, Private Investment Funds in Latin America.

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