The beneficial owner legal arrangement as a response to fraudulent anonymity

Abstract

This paper describes the need to identify beneficial ownership for tax transparency purposes and its legal historical developments within International Law; in addition to the positive impact of the legal concept of beneficial owner as a way to maintain an ethical reference for the community. On the other hand, the beneficial owner, as a figure developed by the FATF in the fight against money laundering and terrorist financing, has been adapted for tax purposes as a normative response to tax evaders and other offenders of the law, who in general try to maintain anonymity to make difficult the activity of tax control by the authority. However, there are several issues that must be resolved in the relationship between the taxpayer and the State; as well as between the investor and the legal representative of the legal entity and of the legal arrangement. Especially an approach to learn about the advantages in its use for the Authority and for the private investor.
Hence the enthusiasm of certain international organizations such as the FATF or the OECD to develop a link between the beneficial ownership and the fight against money laundering, as well as against other economic crimes. The figure studied becomes a practical tool to detect people involved in complex corporate schemes for unethical purposes.
Thus, the article describes how the beneficial owner has developed over time, what it is useful for, a brief look at international experiences, and the perspective forward. All those mentioned have different positions and doubts regarding the implementation in Ecuador and at the regional level of the standards that surround the beneficial owner, some of them are dealt with in this paper.