FATF Recommendation 16: How the LEI Supports National Payment Systems

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FATF Recommendation 16 sets the international requirements for payment transparency. Revised in June 2025, it gives every country until the end of 2030 to implement the changes.

This video follows a central bank policymaker as they work through what that means in practice: how a national payment system carries accurate originator and beneficiary information for legal entities, why national identifiers alone struggle to do so across borders, and where the Legal Entity Identifier (LEI) fits.

R.16 now distinguishes between originators and beneficiaries that are natural persons and those that are legal persons, with the LEI serving as the key identifier for legal persons in qualifying domestic and cross-border transactions. The LEI is a 20-character code, based on ISO 17442, that links to publicly available reference data on the entity behind each payment, including legal name and registered address. When LEIs are carried in payment messages, banks and payment service providers can confirm which entity is which without relying on name matching. That reduces false positives in anti-money laundering (AML) and counter-terrorism financing (CTF) screening and makes cross-border payment reporting more consistent and easier to audit.