Examining Beneficial Ownership Register Adoption in APAC
Key takeaways
- Following the Panama Papers and FATF's 2014 guidance on Recommendations 24 and 25, many APAC jurisdictions have moved to improve beneficial-ownership transparency.
- Singapore and Hong Kong lead adoption, both introducing registers of controllers with limited accessibility at the FATF-recommended 25% threshold.
- Singapore's Companies (Amendment) Act 2017 and Hong Kong's Companies (Amendment) Ordinance 2018 require companies to maintain registers of registrable controllers.
- Australia, New Zealand and Japan have taken only tentative steps, with no firm legislation yet in place.
- With the EU's Fifth Money Laundering Directive mandating public registers from mid-2019, APAC jurisdictions may gradually move toward greater transparency.
In 2014, FATF published a guidance paper, ‘Transparency and Beneficial Ownership’, aimed at assisting countries in implementing measures to address Recommendations 24 and 25 relating to transparency and beneficial ownership of legal persons (R24) and arrangements (R25).
In the wake of the Panama papers, many APAC countries have since implemented an array of legal and regulatory instruments aimed at improving information disclosure, including the establishment of centralized ultimate beneficial ownership registers. The intention is to further lift the veil on beneficial ownership in the region and potentially enhance information sharing on a global scale.
Singapore and Hong Kong are currently leading the way in terms of implementation, with both jurisdictions opting for a register with limited accessibility. In Singapore, the Companies (Amendment) Act 2017, effective since March 31st, 2017, states that all companies incorporated in Singapore and foreign companies must keep a register of registrable controllers (defined at the FATF-recommended 25% threshold) at prescribed places.
Meanwhile in tandem with an increased enforcement focus, Hong Kong’s Financial Services and Treasury Bureau (FSTB) has introduced a number of proposed AML reforms as part of its Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO), which came into force on March 1st, 2018. The Companies (Amendment) Ordinance 2018 came into force on March 1st, 2018.
Australia, New Zealand and Japan have begun to take tentative steps towards implementing beneficial ownership registers but there is no sign yet of any firm legislation taking shape. In Malaysia, companies are required to maintain basic ownership information and these are available to the public.
Beneficial ownership requirements do not operate in a vacuum, but in tandem with other jurisdictional regulations. It may be some time before we see an APAC country opting for a public beneficial ownership register, but with the 5th EU Money Laundering Directive due to make this mandatory in every EU member state from mid-2019, Asia-Pacific may gradually follow suit. If you would like to learn more about how beneficial ownership register adoption is gaining ground, download our whitepaper here.
Frequently Asked Questions
What did FATF's 2014 guidance paper on beneficial ownership address?
In 2014, FATF published a guidance paper, ‘Transparency and Beneficial Ownership’, aimed at assisting countries in implementing measures to address Recommendations 24 and 25 relating to transparency and beneficial ownership of legal persons (R24) and arrangements (R25).
What does Singapore's Companies (Amendment) Act 2017 require regarding beneficial ownership?
In Singapore, the Companies (Amendment) Act 2017, effective since March 31st, 2017, states that all companies incorporated in Singapore and foreign companies must keep a register of registrable controllers (defined at the FATF-recommended 25% threshold) at prescribed places.
What AML reforms did Hong Kong's FSTB introduce, and when did they take effect?
Meanwhile in tandem with an increased enforcement focus, Hong Kong’s Financial Services and Treasury Bureau (FSTB) has introduced a number of proposed AML reforms as part of its Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO), which came into force on March 1st, 2018.
