Brussels, 20 May 2015
According to new data released today by Transparency International (TI), four out of five EU citizens are in favour of companies being required to reveal who the real owners are and only one in four believe their government is effective in preventing dirty money being spent in their country.
This data is released on the day the EU agrees new rules aimed at preventing money laundering in the European Union.
Carl Dolan, TI-EU Director said: “Shell companies can be used hide the proceeds of corruption, criminal activity and to evade tax. They have also been used to cover the trail of those behind the horsemeat scandal. There is a clear public interest in stopping the flows of illegal money that is put at $70 billion in the EU alone. The EU, and European Parliament in particular, should be congratulated on passing new legislation that is a welcome first step in unmasking the corrupt in Europe.
“A number of EU governments say they will establish a publicly accessible register for company ownership. That is what the public want. Making this information fully public would provide instant access for those investigating corrupt money trails in and outside the EU”.
Full access to the information will be granted to law enforcement and relevant government bodies. Members of the public, such as investigative journalists and NGOs, can be granted access to company ownership data if they can prove a legitimate interest. Transparency International calls on all Member States to make such information freely available to all citizens.
The identities of many individuals involved in grand corruption have been concealed through the use of anonymous shell companies, trusts and other entities. According to an analysis by the World Bank and UN of over 200 grand corruption cases, 70% involved corrupt politicians using anonymous companies and trusts to obscure their identity. Money is being stolen from the public on a huge scale, and hidden, depriving people of health, education and other vital services.
The new framework potentially leaves open significant money laundering loopholes, especially with regard to trusts. Information on trusts will not be made publicly available and the types of trusts covered will be limited in scope. This too needs to change.
EU governments will have two years to implement the new standards at national level. The UK, France, Denmark, Czech Republic and the Netherlands have said they will establish a public register for companies.
The EU rules also go beyond what was agreed by the G20 as part of the beneficial ownership principles, which require relevant government authorities to have “timely” access to the data. Transparency International is working with its national chapters to monitor the implementation of the principles in G20 countries this year.
- According to research by Global Financial Integrity, nearly $70 billion flowed illegally into or out of emerging EU economies in 2011. At the same time global detection rates for illicit funds by law enforcement are estimated to be as low as 1% for criminal proceeds and the seizure rate at 0.2% (UNODC).
- Today’s plenary vote by the European Parliament confirms the agreement reached in December on the 4th EU Anti-Money Laundering Directive, which requires the creation of centralised registers of beneficial owners – the real persons who have ultimate control – of a company or trust.