GFI Lauds EU Parliament Vote Endorsing Crackdown on Anonymous Shell Companies
European Vote Increases Pressure on White House & Congress to Move
Full EU Parliament Endorses Creation of Public Registries of Beneficial Ownership Information; Follows Earlier Committee Votes
European Council Should Endorse Move to Curb Phantom Firms in Negotiations with Parliament
March 11, 2014
WASHINGTON, DC – Global Financial Integrity (GFI) praised the full European Parliament for voting today to crack down on anonymous shell companies, a major conduit for laundering the proceeds of crime, corruption, and tax evasion.
Following similar votes by two committees of the EU Parliament last month, the full legislative body voted today in favor of requiring public registries of beneficial ownership information for companies incorporated in the EU, as part of its revisions to the EU’s Anti-Money Laundering Directive (AMLD).
“We strongly praise the vote by the European Parliament to crack down on anonymous shell companies,” said GFI President Raymond Baker, a longtime authority on financial crime. “As our research notes, nearly $70 billion flowed illegally into or out of emerging EU economies in 2011. Anonymous shell companies are the number one tool for laundering the proceeds of crime, corruption, and tax evasion. Creating public registries of the true, human, ‘beneficial’ owner of each company—as the Parliament endorsed today—is a common sense approach to curbing financial crime and the tremendous flow of illegal money.”
The move follows an announcement by UK Prime Minister David Cameron in October that the United Kingdom would be creating a public registry of the beneficial owners of all companies registered in the UK, and it significantly raises pressure on the United States to follow suit.
“The U.S. is the second easiest place in the world, next to Kenya, for someone to create an anonymous shell company to launder illicit proceeds,” noted Heather Lowe, GFI’s legal counsel and director of government affairs. “The White House has repeatedly endorsed the need for legislation to ensure that beneficial ownership information on all U.S. companies is available (at least) to law enforcement, but momentum has been slow to build behind that commitment.”
“Bipartisan legislation has been introduced in both the U.S. House of Representatives and the U.S. Senate that would create registries of beneficial ownership information which would be available to law enforcement, but the Administration and Congressional leadership have been slow to push the issue,” continued Ms. Lowe. “Now is the time for Congress and the Administration to live up to their G8 and Open Government Partnership commitments by moving to pass legislation to protect the American people from criminals laundering their proceeds through the U.S. financial system.”
Following the European Parliament’s vote today, negotiations over the EU’s AMLD now turn to discussions between representatives of the European Council, the EU Parliament, and the EU Commission before a final framework is adopted and implemented.
“We call on the European Council to honor the will of the people by moving quickly to endorse the creation of public registries of beneficial information,” added Mr. Baker, GFI’s president.
Notes to Editors:
Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization, which promotes transparency in the international financial system as a means to global development.