The following recommendation by Financial Action Task Force on Money Laundering, that "Countries should take notice of the potential for abuse of shell corporations by money launderers and should consider whether additional measures are required to prevent unlawful use of such entities" was supported by a set of recommendations ( 10 Commandments) published in a working paper published by Transparency international.

A domiciliary company is defined as including: institutions, corporations, foundations, trusts etc that do not conduct any commercial or manufacturing business or any other form of commercial operation in the country where their registered office is located. In effect these are shelf or shell companies.

There is a number of graphics on the website http://www.metaphorbusinessgraphics.com in the Money-Laundering section,depicting issues related to money-laundering

A. The role of national legislations

1. Each country shall introduce the necessary legislative measures to ensure that domiciliary companies:
1. pay up the share capital by means of payments which should be verified by a state authority;
2. have available an amount of share capital which corresponds to their own assets, to their liabilities towards third parties and to their activity;
2. draw up an annual balance sheet which should be deposited with the commercial registry office Each country shall introduce the necessary legislative measures to ensure that the following are entered in the commercial register:
1. the names of all persons authorised to sign on behalf of a company as well as those vested with legal authority - especially in the form of power-of-attorney - or exercise practical managerial powers, even when such a company exercises all or part of its activity abroad and even if another company has been delegated to carry out the managerial duties;
2. the data concerning every domiciliary company which carries out an activity in the territory of the country concerned or has its assets managed there, even if the said company has its registered office abroad, especially in an off-shore country.
3. together with the report of an independent auditor.

B. Intensification of international co-operation

1. Every country shall introduce the necessary legislative measures to ensure that, in the event of domestic criminal proceedings or a legal assistance procedure:
1. where the assets of a domiciliary company have been confiscated or seized by a bank, fiduciary or financial company or similar institution, it is the responsibility of the person in charge of the domiciliary company concerned to prove the lawful origin of these assets;
2. only the director of the domiciliary company is authorised to lodge an appeal against a court order for the delivery or confiscation of documents concerning the assets or financial transactions of the company concerned;
3. when witnesses are being heard in connection with investigations into the financial interests and the identity of the director of a domiciliary company, there shall be no right to refuse to give evidence even if the witness concerned is a lawyer, solicitor, banker, trustee, broker, administrator or auditor who claims to be bound by professional secrecy.

Role of the finance sector

1. In order to comply with the requirements concerning the identification of domiciliary companies, financial institutes shall demand:
1. the official confirmation concerning the actual payment of the share capital;
2. the most recent balance-sheet accompanied by the auditors' report;
2. The auditors shall require a detailed list of the services provided by the domiciliary company and the bills and invoices drawn up in the course of its business, together with the identity and signatures of the parties involved.
3. Financial institutes shall regard the utilisation of domiciliary companies located in an off-shore country as an indication of potential money laundering. Accordingly, every transaction made by means of such a company or in the interests of such a company must be verified with special care.

1. the yearly updating of the documents submitted at the founding of the business, in particular the signed declaration by the managing director.

Co-operation by off-shore countries

1. Off-shore countries shall provide the Secretariat of the designated international organisation, on a yearly basis:
1. statistics on the number of domiciliary companies founded during the course of the year and statistics concerning the volume of assets managed by these domiciliary companies located in the country concerned;
2. a report on the situation concerning the compliance with and application of, generally recognised norms, including these ten rules.

1. Off-shore countries shall introduce the necessary legal measures to ensure that:
1. each company established in the corresponding countries has paid up a minimum amount of company capital, whose volume corresponds to the activities of the company, the scope of the assets managed by the company itself and its liabilities towards third parties;
2. the actual payment of the share capital on the occasion of the founding of the company or an increase in its capital by means of a deposit with the national bank. Without the corresponding confirmation by the national bank, the commercial registry office shall not record the founding of the company or the increase in capital.

1. Off-shore countries shall introduce the necessary legislative measures to ensure that every company draws up a current list of:
1. the persons in charge of managing the company;
2. the persons who possess power-of-attorney or authority to sign on behalf of the company;
3. the persons who are physically responsible for the management of the company concerned.

10. Off-shore countries shall introduce the necessary legislative measures to ensure that:

1. each company draws up an annual balance-sheet and profit and loss account, which must be made available to the commercial registry office;
2. the company's accounts as well as its annual balance-sheet and profit-and- loss account must be checked by an independent auditing firm which has been officially authorised by the government to practise its profession

The above Ten recommendations seek to prevent the misuse of off-shore domiciliary companies.