With just days remaining until Britain decides on its EU membership, the UK is at a crossroads. It has a historical choice to make, with various consequences attached to the decision on the 23rd of June on whether it becomes the first ever country to leave the EU. Those consequences could include undermining the leading role that Britain has taken in the global fight against corruption and transforming Britain into an even greater tax haven for multinationals.
By Sophie Haggerty, June 15, 2015
Other Countries Should Follow Norway’s Example
On June 5, the Norwegian Parliament unanimously voted to establish a public registry of corporate ownership information, becoming the latest country to tackle the abuse of anonymous companies through increased transparency.
Anonymous companies are one of the top tools used by criminals, kleptocrats, tax evaders, and terrorists to launder dirty money with impunity. Requiring companies to publicly disclose in a central registry their ultimate, human, beneficial owner(s) is regarded as the gold standard in tackling the abuse of these phantom firms.
Norway’s strong endorsement of transparency comes as no big surprise: the Scandinavian country routinely ranks near the top of transparency and anti-corruption rankings, and Norway was the first country to get behind the push to curb illicit financial flows. Their support on this topic dates back to the formation of the Norwegian Government-led Task Force on the Development Impact of Illicit Financial Flows in 2007 and their financial backing of the Financial Transparency Coalition at its inception in early 2009–long before illicit flows topped the global agenda.
In establishing a public registry, Norway joins Denmark and the United Kingdom—the first country to commit to a public registry of beneficial ownership information back in October 2013. The UK followed through with its commitment this March by passing historic legislation needed to fulfill its pledge.
World Leaders Urged to Target Illicit Flows, Trade Misinvoicing at Addis Summit
The outlook was promising. In the outrage over the unfolding FIFA corruption scandal, UK Prime Minister David Cameron vowed Saturday to put corruption on the agenda of this week’s G7 Summit in Germany.
G7 Communiqué Ignores Illicit Flows in the Context of the Post-2015 Development Agenda
World Leaders Urged to Target Illicit Flows, Trade Misinvoicing at FfD Conference
WASHINGTON, DC – Global Financial Integrity (GFI) expressed disappointment in world leaders Monday for failing to advance efforts to curtail illicit financial flows—particularly in the context of the Post-2015 Development Agenda. The G7 failure comes despite a new GFI study released on Wednesday showing the outsized-impact that illicit financial flows (IFFs) have on the poorest countries in the world, and notwithstanding a Friday pledge by UK Prime Minister David Cameron to put corruption on the agenda of the G7 Summit, which concluded today in Germany.
UK Enacts Legislation to Curb Abuse of Anonymous Companies—A Prime Money Laundering Vehicle—with Public Registry of Corporate Ownership Information
U.S. the 2nd-Easiest Place for Criminals to Open Anonymous Companies to Launder Dirty Money
WASHINGTON, DC – The United Kingdom today enacted legislation to crack down on the abuse of anonymous companies—a major conduit for laundering the proceeds of crime, corruption, and tax evasion—in a move that raises pressure on the United States to clean up its own house, noted Global Financial Integrity (GFI), a Washington, DC-based organization working to curtail illicit financial flows.
Negotiators Finalize Revisions to EU Anti-Money-Laundering Directive, Including Crucial Measures on Beneficial Ownership Transparency
United States Continues to Lag Behind International Progress on Key Element of Curtailing Illicit Financial Flows
WASHINGTON, DC – Global Financial Integrity (GFI) applauded the European Parliament and the Council of the European Union for agreeing yesterday to crack down on anonymous companies, a major conduit for laundering the proceeds of crime, corruption, and tax evasion. Just Tuesday, GFI released its annual flagship analysis of illicit financial flows from developing countries, which found that such flows—growing at nearly twice the rate of global GDP—reached a historic high of US$991.2 billion in 2012, the most recent year for which data is available.
By Liz Confalone, December 5, 2014
Slow but Steady Progress towards Curtailing the Abuse of Anonymous Companies
In June 2013, G8 leaders met in Lough Erne and agreed to a set of principles on beneficial ownership transparency. The principles state that companies should maintain their beneficial ownership information and that the information should be available to law enforcement and other competent authorities; additionally, countries were to consider making such information available to financial institutions and other regulated businesses. Trust information should be collected and available, the principles explained, but only to law enforcement. These principles were largely reiterated by the Financial Action Task Force (FATF)—the body setting international anti-money laundering standards—in their Guidance on Transparency and Beneficial Ownership in October 2014 and by the G20 in their High Level Principles on Beneficial Ownership in November 2014.
Despite the establishment of this baseline, momentum is building since Lough Erne to raise the bar. In July 2013, the UK began the process to establish a central register of information and, after a public comment period, determined that the register should be publicly available—a position strongly supported by Global Financial Integrity (GFI). In April 2014, the European Parliament approved provisions requiring formation of public registers as part of their draft of the European Union’s Fourth Anti-Money Laundering Directive (AMLD), but the E.U. Council and the E.U. Commission have yet to take a public position on the AMLD, delaying its final adoption. Just last month, Denmark announced that it, too, would create its own public registry of beneficial ownership information.
World Leaders’ Weekend Summit Misses Opportunity to Act on Beneficial Ownership or Country-by-Country Reporting
Work Remains to Ensure Developing Countries Benefit Fully From Global Automatic Exchange of Financial Information, but Agreement to Include Developing Countries in OECD BEPS Project an Encouraging Move
WASHINGTON, DC – G20 leaders met this past weekend in Brisbane, Australia for their annual summit, issuing a communiqué full of ambitious proposals for growing the global economy, but noticeably lacking in responses to illicit financial flows, one of the largest drags on development worldwide. Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization, expressed its disappointment at the underwhelming result.