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UK Unveils "Action Plan" On Beneficial Ownership Rules

By Amanda Banks,, London

25 June 2013

The UK Government has confirmed its commitment to new standards formulated by the Financial Action Task Force, announcing plans that include new information-sharing and transparency measures relating to the beneficial ownership of companies and trusts and a review of corporate transparency.

The FATF is an international body currently made up of 34 member states. It was created in 1989 to prevent money laundering and terrorist financing, and the UK’s promise follows talks at the G8.

Under the new standards, the Companies Act 2006 will be revised to ensure that information about ownership and control is accurate and readily available to the authorities through a central registry of beneficial ownership. The registry will be maintained by Companies House, and the Government will consult on whether it should be publicly accessible.

The trustees of express trusts will also be obliged to obtain and hold information relating to beneficial ownership. This information will also be made accessible to relevant authorities, and mechanisms will be put in place so that it can be shared with other jurisdictions, in line with international agreements.

There will also be improved supervision and enforcement of those who facilitate company formation, beginning with trust and company service providers and including new consideration of how to ensure due diligence relating to the identification and verification of beneficial owners.

Meanwhile, the Department for Business, Innovation and Skills will begin a review of corporate transparency, including bearer shares and nominee directors. The process will begin with a pre-consultation paper, to be published before September 2013.

The Government also intends to conduct a national assessment on money laundering and terrorist financing risks by 2014, and to support Overseas Territories and Crown Dependencies in publishing their own Action Plans.

The Government describes the moves as "a matter of good corporate governance as well as a means to tackle a wide range of illicit activity." As well as amending the Companies Act 2006, the Government will introduce the measures through domestic incorporation of the 4th EU Money Laundering Directive, as well as through UK Money Laundering Regulations and other relevant bilateral and multilateral agreements.

TAGS: company formation | law | trusts | United Kingdom | enforcement | agreements | corporate governance | Financial Action Task Force (FATF)

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