As the “getaway car” for criminals, the head of the global financial crime watchdog has urged nations to come clean about their use of shell firms and stated that the issue will be a major focus of a new series of national evaluations.
The focus on shell corporations by the Financial Action Task Force follows this year’s retreats by Switzerland and the United States under President Donald Trump on beneficial owner transparency regulations.
A global anti-money laundering organization established in Paris, the FATF evaluates nations on their execution of suggestions aimed at lowering financial crime every six years.
Keeping a register of current and accurate information about the individuals who own businesses and entities—also referred to as “beneficial ownership”—is one of them.
FATF President Elisa de Anda Madrazo told reporters in an interview that “we will be looking heavily into the effectiveness of those systems” in the upcoming round of assessments, calling shell corporations the “getaway car” that allows criminals to transfer money globally undetected.
“Countries need to make sure that the information is updated, complete, accurate, and readily available for law enforcement authorities,” she stated.
“We do see countries that are implementing the standard and moving into that direction,” she stated.
The FATF has the authority to place nations on its “grey list” if they have inadequate anti-money laundering policies, which increases oversight and may make them less appealing to investors.
Monaco and the British Virgin Islands are among the nations that are currently on the list.
Myanmar, Iran, and North Korea are prohibited.
Washington announced several policies earlier this year to fight money laundering.
While overseas companies are still required to submit data on their beneficial ownership, the U.S. Treasury Department’s financial crimes branch ceased asking domestic companies to do so in March.
The government had previously warned that the exclusion of foundations and groups from a planned national transparency register of beneficial owners by Switzerland’s parliament in June would compromise the country’s efforts to combat money laundering and terrorist funding.
Nearly 20 million of the 472 million registered firms worldwide in a 2023 Moody’s survey exhibited at least one trait that would point to a shell company.
By far the most red flags were raised in the UK.
When asked if growing worldwide polarization was making it more difficult to fight crime, de Anda Madrazo responded that “any kind of fragmentation on international collaboration and communication impairs an agenda.”
“At the FATF level, I can tell you that this year, we haven’t seen a decrease in the commitment of the members,” de Anda Madrazo stated.
That also applied to the larger worldwide network, she noted.
Authorities are playing “whack-a-mole” with online crime, which is a major issue for FATF, according to de Anda Madrazo.
Since criminals are increasingly using virtual assets like cryptocurrencies to transfer money across borders covertly, they continue to be a top priority for FATF, she said.
