#23 in the LEI Lightbulb Blog Series – Implementing FATF Recommendation 16 to Increase Payment Transparency
The Financial Action Task Force has launched a consultation on draft implementation guidance for its revised Recommendation 16. In this blog, Clare Rowley, Head of Business Operations at GLEIF, sets out GLEIF's response to the guidance – welcoming its continued recognition of the LEI, identifying where further clarification could strengthen consistent implementation across jurisdictions ahead of the 2030 deadline, and outlining how the Global LEI System continues to evolve to promote increased transparency.
Author: Clare Rowley
Date: 2026-08-04
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June 2025 marked a significant milestone in the global fight against financial crime. Following extensive engagement, the Financial Action Task Force (FATF) published its revised international requirements on payment transparency outlined in Recommendation 16 (R.16), also known as the 'Travel Rule'. The revisions promise to address the longstanding challenges and complexities posed by fragmented and inconsistent data to better detect and prevent financial crime, while supporting the G20 roadmap for making cross-border payments faster, cheaper, more transparent, and more inclusive.
One major update introduced was to explicitly differentiate between originators/beneficiaries that are physical persons and those that are legal persons, with the Legal Entity Identifier (LEI) serving as the key identifier for legal persons in qualifying domestic and cross-border transactions.
All countries worldwide must be ready to implement the changes to R.16 by the end of 2030. Yet this is not a straightforward exercise. This is why, to support countries and financial institutions in implementing the new requirements by the deadline, FATF has launched a publication consultation on the draft implementation guidance to gather views from industry stakeholders.
Reinforcing the value of the LEI for increasing payment transparency
GLEIF welcomes the draft guidance, particularly the continued recognition of the LEI as a "a widely recognised and publicly accessible ISO standard-based identifier that provides standardised, globally interoperable reference data on legal entities, supporting more effective verification and monitoring." This stands in contrast to local and national identifiers, which "may not provide access to standardised data and may not be publicly accessible."
While R.16 already recognizes the LEI as one of the global identifiers available for identifying legal persons, the draft guidance goes a step further by explaining the practical value of the LEI in supporting standardized, publicly accessible, and interoperable legal entity reference data.
This additional implementation guidance will help financial institutions and payment service providers better understand how the LEI can improve the quality, consistency, and automation of legal entity identification across payment ecosystems, thereby streamlining compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) obligations.
Clarifying reliable and independent sources for legal person verification
There are also opportunities to further strengthen the guidance by clarifying how globally recognized identifiers can support more consistent, interoperable, and automated implementations across jurisdictions.
One specific area where the guidance could provide greater clarity concerns what constitutes a "reliable and independent source" for verifying legal person information, such as name and address. Importantly, the LEI links to verified and regularly updated reference data for legal entities, including their legal name and registered address. This information is publicly available through the Global LEI Index and can be accessed by ordering financial institutions, beneficiary financial institutions, payment service providers and competent authorities.
Indeed, several jurisdictions have already recognized the benefits of leveraging the LEI to strengthen legal entity verification and promote increased payment transparency. For instance, the EU's Instant Payment Regulation (IPR) acknowledges the LEI's ability to support more effective Verification of Payee for instant credit transfers, with the forthcoming Payment Services Regulation (PSR) also expected to extend Verification of Payee requirements to other credit transfer scenarios. Elsewhere, the United Kingdom and India have introduced, or are adopting, the LEI to support more reliable account and beneficiary validation.
Given this demonstrable regulatory momentum, GLEIF encourages FATF to explicitly recognize the LEI in its guidance as a practical and reliable mechanism for verifying legal person information through authoritative, independently maintained public reference data. Such recognition would support more consistent implementation of R.16 while promoting greater interoperability, automation and payment transparency across jurisdictions.
In addition, GLEIF encourages further consideration of digital identity frameworks – particularly emerging organizational identity frameworks – as reliable sources of identifier data. For example, the LEI is a recognized data attribute within the European Union's eIDAS framework and could be extracted directly from a legal person's digital identity credential in the future EU Business Wallet. Such credentials would be independently verified by qualified trust service providers regulated under the eIDAS framework.
To reaffirm the role that globally standardized organizational identifiers and emerging digital organizational identity frameworks can play in streamlining due diligence requirements and increasing payment transparency worldwide, GLEIF urges all LEI stakeholders to share their feedback by Friday, 21 August 2026 .**
Shaping the evolution of trusted and reliable LEI data
The guidance's emphasis on reliable, independent information sources for payment transparency and counterparty verification also reflects and reinforces the direction of the Global LEI System's ongoing evolution.
GLEIF is exploring potential new LEI data services designed to deliver even greater value to data users and market participants. These initiatives aim to further enhance the timeliness, transparency, and reliability of LEI data by aligning more closely with authoritative sources, such as business registries.
As this work continues, broad industry feedback will help GLEIF better understand market needs, evaluate potential use cases, and ensure that any future services align with practical, real-world industry requirements. All interested stakeholders are encouraged to complete the survey here.
The ‘LEI Lightbulb Blog Series’ from GLEIF aims to shine a light on the breadth of acceptance and advocacy for the LEI across the public and private sectors, geographies, and use cases by highlighting which industry leaders, authorities, and organizations are supportive of the LEI and for what purpose.
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Clare Rowley is the Head of Business Operations at the Global Legal Entity Identifier Foundation (GLEIF). Prior to working with GLEIF, Ms. Rowley worked at the United States Federal Deposit Insurance Corporation where she led technology initiatives improving bank resolution programs and contributed to research on subprime mortgages. Ms. Rowley is a CFA® charter holder and holds a MS in Predictive Analytics from Northwestern University.
