WASHINGTON: Anonymous ghost companies are one of the most used methods to launder the proceeds of crime and corruption, says the latest report of the Financial Action Task Force (FATF) of the international financial agency based in Paris.
His latest report identifies "best practices" to help countries "get rid of secrecy" in relation to the final owner of a company, foundation, association or any other legal person, and prevent its misuse of crime and terrorism.
"The transparency of real beneficiaries is essential to prevent the misuse of companies, associations or other entities for money laundering or terrorist financing," says the report.
An effective beneficiary is a legal term to describe a person who enjoys the benefits of the property even though the title of that property or business is in another name.
The FATF recommendations require countries to ensure that authorities can obtain up-to-date and accurate information about the people behind the companies, foundations and other legal entities.
In early 2016, the International Consortium of Investigative Journalists published the so-called "Panama Papers", documents that show the ownership of several thousand offshore corporations. While many were used legally, the documents showed that some real beneficiaries were hidden for nefarious or illegal reasons.
The documents also identified several influential Pakistani citizens as beneficiary owners who violated the FATF recommendations by not disclosing their association with offshore companies.
Published on Dawn, October 28, 2019
Source: https://www.dawn.com/news/1513333/fatf-report-highlights-dubious-role-of-shell-firms