November 7, 2014
Clark Gascoigne, +1 202 293 0740 ext. 222
Move Strikes at One of the Biggest Tools for Laundering Money
Danish Plan Raises Pressure on European Council and Commission, G20, and U.S. to Take Action
WASHINGTON, DC – The Danish government announced today that it will create a public registry of beneficial ownership information for all Danish companies in a move lauded by Global Financial Integrity (GFI) as key to cracking down on one of the biggest tools for laundering the proceeds of crime, corruption, and tax evasion.
“We wholeheartedly welcome the Danish government’s move to crack down on anonymous companies,” said GFI President Raymond Baker, a longtime authority on financial crime. “Anonymous 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 Danish intend to do—is a common sense approach to curbing financial crime and the tremendous flow of illegal money.”
The move follows an announcement last year by the British government that the United Kingdom would be creating a public registry of the beneficial owners of all companies registered in the UK, as well as an endorsement by the European Parliament, which voted overwhelming in March in favor of directing European Union member states to create public registries as part of revisions to the EU’s anti-money laundering directive (AMLD). The announcement raises pressure on the European Council and Commission—which have been reticent to sign off on the transparency rule—to approve the inclusion of a public registry mandate in the final AMLD.
“We call on the European Council and Commission 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.
G20 Set to Consider Action
The Danish announcement likewise raises pressure on G20 leaders—who meet for their annual summit in Brisbane next week—to strengthen their commitment to combat anonymous companies by endorsing the creation of public registries of anonymous companies.
“Anonymous companies facilitate the most heinous acts—from sex slavery, to arms trafficking, to bribery and corruption—anonymous companies enable criminals to carry out crime after crime with impunity,” said Heather Lowe, GFI’s legal counsel and director of government affairs. “But, beyond the narrow law enforcement angle to this issue, is a larger point: everyone should be able to determine with whom they are doing business. That is why it is so important that beneficial ownership information is not simply collected, but that it’s public and available to everyone.
“Putting this information in the public domain is very important to, among others, banks, who need this information to carry out their customer due diligence; to businesses, who need this information to vet potential business partners; to journalists who need this information to carry out their investigations; to investors, who need this information to adequately gauge their own exposures,” continued Ms. Lowe, who laid out a list of the many constituencies who want this information publicly available in a blog post just last week. “We strongly urge the G20 to endorse public registries of beneficial ownership information when they meet in Brisbane next week.”
Further, today’s announcement escalates 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 company to launder illicit proceeds,” noted Joshua Simmons, GFI policy counsel. “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 that would be available to law enforcement, but the Administration and Congressional leadership have been slow to push the issue,” continued Mr. Simmons. “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.”
Notes to Editors:
- Click here to read an HTML version of this media advisory on our website.
- Click here to read an article in Børsen (paywalled and in Danish), the Danish financial newspaper reporting on Denmark’s announcement.
- Click here to read Ms. Lowe’s blog post on why beneficial ownership information should be made public, published October 30, 2014.
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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.
For additional information please visit www.gfintegrity.org.