Legal Persons and Arrangements ML Risk Assessment Tool : With Guidance on Assessing Risks Related to Beneficial Ownership Transparency
Legal structures are used to conduct a wide range of legitimate commercial activities and play an essential role in the global economy. In most countries, companies and other forms of legal structures can be formed easily and quickly and can gain a...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099705007122242693/P1723550c3efe504d0a3630e857733aa054 http://hdl.handle.net/10986/37701 |
| Summary: | Legal structures are used to conduct
a wide range of legitimate commercial activities and play an
essential role in the global economy. In most countries,
companies and other forms of legal structures can be formed
easily and quickly and can gain access to the global
financial system through setting up a corporate bank
account, taking out corporate loans, and using other
financial products. Through anti-money laundering (AML) and
anti-financial crime regulatory reforms, anonymous personal
bank accounts are no longer widely available, and so-called
‘shell banks’ that do not have any physical presence in any
jurisdiction have been effectively outlawed. Instead, shell
companies and other forms of legal structures (such as
limited liability partnerships) have emerged as a primary
mechanism for moving large amounts of illicit funds around
the world. Corporations were originally established to
shield individuals from personal liability when conducting
business; they were never designed or intended to conceal
ownership. But beginning in the 1970s, some offshore
jurisdictions began offering to establish corporations and
other legal structures that would enable individuals to open
bank accounts, transfer funds, and take other actions while
hiding their identities. There are four aspects of shell
companies and other types of legal structures that are
particularly important in the anti-money
laundering/combating the financing of terrorism (AML/CFT)
context: (1) separate legal personality, (2) hiding ultimate
beneficial ownership, (3) providing access to the financial
system, and (4) enabling asset ownership. |
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