Nearly all FATF members cited alternative remittance activity within their jurisdictions. The report recommends that governments continue to study the systems as they relate to money laundering to find potential common measures to preclude their use in support of illegal business. The report cites these players in the global laundering economy as a key factor in the increasing number of complex laundering schemes utilized by criminals around the world. It says money launderers seek the services of company formation agents to establish judicial persons or legal entities in countries that do not require identification of the true owner of the entity or that place strict secrecy controls on company information. The launderers then use the companies to move illicit proceeds through various company accounts.
Agents provide clients with guidance on the best jurisdiction in which to establish a company.
They also offer services including mail and fax receipt and forwarding, telephone answering, and establishment and administration of bank accounts, all of which can give front companies an air of legitimacy. The report prescribes heightened oversight of company formation agents to diminish their attractiveness to launderers. It says agents should be required to obtain a license to perform their services and be subject to Know Your Customer and suspicious activity reporting requirements. The report says this mechanism continues to play a virtually unchecked role in the movement of illicit proceeds. It cites a lack of appropriate training among customs authorities in many countries as an impediment to detecting suspicious international trade transactions.