Financial crimes grow during pandemic; accounting groups address key piece of AML action

Thursday, 28 May 2020 00:00 - - {{hitsCtrl.values.hits}}

Report from CPA Canada and IFAC analyses best approaches to beneficial ownership transparency

As a result of the COVID-19 pandemic and the unprecedented sums of relief money moving across the global economy, the threat of financial crimes and malfeasance continues to grow. In this context, CPA Canada and the International Federation of Accountants (IFAC) has published a report that explores a key facet of uncovering and fighting illegal activities: beneficial ownership transparency.

The fight against money laundering, corruption and tax evasion requires the participation of several stakeholders, including accountants, who rely on strong legal frameworks and accurate information.

“Beneficial ownership information, which identifies who has controlling ownership of an entity, is important to the discovery of financial crimes,” said CPA Canada President and CEO Joy Thomas. “Enhancing the transparency of this information should strengthen anti-money laundering regimes and help in seeking out lawbreakers and their proceeds of crime.”

The report, ‘Approaches to Beneficial Ownership Transparency: The Global Framework and Views from the Accounting Profession,’ contributes to the global conversation as countries grapple with questions regarding the extent to which, and by whom, beneficial ownership information is collected, reviewed and made available. Central to this discussion is the concept of beneficial ownership registers and registries.

In examining how various countries are complying with the recommendations from the Financial Action Task Force (FATF) on transparency and beneficial ownership information, and with the perspectives of senior accounting leaders across the globe, the report finds that:

• Establishing a public beneficial ownership registry does not immediately ensure that a country’s law enforcement and other agencies have access to accurate information in a timely manner.

• In several jurisdictions, the move to a public registry has been a phased approach, starting with non-public registries and then transitioning to public registries; and

• Verifying information and ensuring appropriate levels of access are key factors in a registry’s efficacy.

“The global accountancy profession, with its strong public interest mandate, is a committed partner in the fight against financial crime,” said IFAC CEO Kevin Dancey. “We are eager to advance important policy conversations, including those over beneficial ownership, and to work meaningfully alongside governments, law enforcement and other stakeholders to combat financial crime in all its forms.”

With this report, the authors offer considered insights on the most effective ways to comply with international anti-money laundering standards. To view the first report, visit: cpacanada.ca/beneficialownership.