Today, the European Parliament endorsed the creation of public registers of who really owns companies, trusts and other legal structures. This will make it much harder for criminals, tax evaders, corrupt politicians and other money launderers to hide their identity, and their illicitly-acquired assets, behind anonymous companies and trusts.
The Parliament voted 643 to 30 in favour of a common position on the revision of the EU Anti-Money Laundering Directive (AMLD). This is particularly relevant as European countries, which are expected to adopt the proposed revision in the coming months, freeze assets belonging to former members of the Ukrainian government. Work by the Ukrainian Anti-corruption Action Centre and Global Witness has revealed how the ousted President Yanukovych used anonymous European companies to hide ownership of huge assets. The stronger oversight and enhanced scrutiny that would come with public disclosure of the real owners of companies and trusts would make this much harder.
Koen Roovers, EU advisor for the Financial Transparency Coalition, said: “The European Parliament clearly wants to move beyond the status quo. The current system has bred a vast network of anonymous shell companies, which are used to funnel money that’s been gained through illegal practices, or embezzled from a government’s coffers. While corruption allegations related to the former government of Ukraine are now being investigated, many other countries, including developing nations, remain vulnerable to these tactics.”
Tove Maria Ryding, tax justice coordinator at Eurodad, said: "We are delighted that the European Parliament has given its full backing to a crackdown on shadow companies and financial secrecy. Now we are looking towards the EU member states to show that they are also ready to support this important step in the fight against tax fraud, money laundering and corruption.”
Catherine Olier, Oxfam’s EU policy advisor, said: “The European Parliament showed today that Europe is fed up with shady, behind-the-door practices which allow billions in tax revenues to slip away from the world’s poorest countries. This transparency is vital in ensuring money is kept in those countries who desperately need it for vital public services such as schools and hospitals”.
Robert Palmer, money laundering campaign leader for Global Witness, said: “Anonymous companies are the getaway cars for crime and corruption. We now call on European governments to side with the Parliament and take away the keys”.
Nienke Palstra, policy officer at the Transparency International EU office concludes, “The fallout from events in the Ukraine once again demonstrate the inadequacies of the EU’s anti-money laundering rules. The European Parliament has recognised the need for public registers to address these shortcomings. EU governments should do the same.”
Notes to Editors
Today’s EP vote sends a strong signal to EU governments, which are now expected to strike a deal on the revision of the AMLD directive, that public registries are much needed to end secret corporate ownership. Once the deal is clinched between governments, these will get into negotiations with the Parliament and the European Commission for a final agreement.
If the EU’s Anti-Money Laundering Directive (AMLD) is revised according to today’s vote, any company registered in an EU member state will be required to provide information about its beneficial owner including: name, date of birth, nationality, jurisdiction of incorporation, contact details, number and categories of shares, and – if applicable - the proportion of shareholding or control. Trusts will have to provide similar information.