Abstract
A model Anticorruption Protocol to the United Nations Convention against Corruption (APUNCAC) would implement international requirements to report the beneficial ownership of funds involved in certain financial transactions. The purpose is to discourage laundering of illicit funds by attaching legal consequences to each failure to obtain and submit a required report of beneficial ownership, and each failure by a front man who poses as a beneficial owner to supply true information regarding the identity of the actual beneficial owner. This article is the fourth in a series of articles describing APUNCAC’s anti-money laundering (AML) provisions and focus on beneficial owner transparency. The companion articles focused on issues regarding international jurisdiction and enforcement of APUNCAC regarding distant offshore personnel and illustrated the application of APUNCAC to specific money laundering channels. This article translates APUNCAC’s key provisions into proposed Financial Action Task Force (FATF) recommendations, provides guidance regarding the necessary domestic conforming legislation, responds to frequently asked questions, and discusses the rationale for expansion of existing FATF recommendations.
Highlights
Financial Action Task ForceDespite efforts to control money laundering and financial crime, gaps remain in the international financial system, suggesting the need for aggressive measures
The purpose of the requirements is to discourage laundering of illicit funds by attaching legal consequences to each failure to obtain and submit a required report of beneficial ownership, and each failure by a front man, who poses as a beneficial owner, to supply true information regarding the identity of the actual beneficial owner
New Financial Action Task Force (FATF) Recommendation #1) that would apply to nationals of States Parties to the rule and transactions involving funds sent to or from the jurisdiction of States Parties to the rule, and a database maintained by Financial Crimes Enforcement Network (FINCEN) that would serve as a central repository of beneficial owner information for each covered financial transaction and would facilitate the investigation and prosecution of financial crime and associated crime
Summary
Despite efforts to control money laundering and financial crime, gaps remain in the international financial system, suggesting the need for aggressive measures. Instead of presenting APUNCAC as a single 200-page international treaty, this article breaks APUNCAC into a series of 19 FATF recommendations This approach serves to bypass the need to obtain agreement among contentious UN Member States regarding a single consolidated text, bypasses the need to obtain ratification by those states, and bypasses the complications and delays that are involved in drafting and pursuing an international convention. If agreement can be obtained among domestic leaders regarding the recommendations, detailed language would be drafted by parliamentary committees and implemented by government regulators. This process would occur independently within each country. The strategy of breaking APUNCAC into a series of FATF recommendations may be the best approach for incorporating the APUNCAC language into law and regulation
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