The world’s leading financial crime watchdog has urged governments to tighten oversight of shell companies, warning that weak disclosure rules are enabling money laundering, tax evasion, and sanctions evasion on a global scale.
The Financial Action Task Force (FATF) said in a new report that too many jurisdictions still allow companies to obscure their true owners through complex ownership structures and nominee directors. The watchdog stressed that without stronger transparency rules, criminal networks and corrupt officials will continue to exploit shell firms to move illicit funds undetected.
“Anonymous shell companies remain one of the most dangerous blind spots in the global financial system,” the FATF said, calling on member states to ensure that corporate registries include accurate, up-to-date information on beneficial owners and that such data is accessible to law enforcement.
The report highlighted concerns over countries that have formally pledged reforms but lag in implementation, with FATF warning that delays create systemic vulnerabilities. The watchdog urged governments to coordinate internationally, pointing to loopholes exploited across borders to funnel billions of dollars in dirty money.
Shell companies — often registered in secrecy-friendly jurisdictions — have been linked to high-profile corruption scandals, sanctions violations, and organized crime. Transparency advocates argue that stricter beneficial ownership rules are essential to prevent financial havens from undermining global enforcement efforts.
FATF’s call adds pressure on governments ahead of its upcoming plenary meeting, where members are expected to assess compliance and consider further measures against jurisdictions seen as laggards on corporate transparency.
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