Financial Transparency Coalition

Washington / Brussels – A group representing over a thousand civil society organizations has sent a letter to European Internal Markets Commissioner, Michel Barnier, asking for legislation requiring all companies to reveal their true owners, as part of the ongoing revision of Europe’s anti-financial crime laws.

Signatories, including anti-corruption coalitions such as The UN Convention Against Corruption, Publish What You Pay, European Coalition for Corporate Justice, development groups such as and Eurodad, religious organizations like Koordinierungsstelle der Österr. Bischofskonferenz and environmental associations such as Friends of the Earth Netherlands and Milieudefensie, called on the European Commission to require companies to reveal their true ownership.  At present, corrupt politicians, money launderers, tax evaders and other criminals find it all too easy to hide their identity behind companies, allowing them to move their ill-gotten gains around the world.

The move comes on the heels of a similar letter sent by dozens of U.S. business and civil society groups to members of the House of Representatives and Senate urging them to co-sponsor the bipartisan Incorporation Transparency and Law Enforcement Assistance Act endorsed by the Obama Administration. That bill would require companies to disclose their ultimate owners at the time of incorporation.

“In Europe as in the U.S., civil society groups concerned about corruption are joined by environment and religious groups who understand that we simply must have greater transparency if we are to fight financial crimes. Knowing who exactly owns a company would stop criminals from being able to easily hide their identities – and ill-gotten gains – behind otherwise legal companies” said Robert Palmer of Global Witness and one of the letter’s authors.

It is not only civil society organizations calling for these changes, but industry groups too.  The European Banking Industry Committee (representing banking groups from across the continent) fear that under the current system there is not enough information available for banks to be able to carrying out their anti-money laundering requirements.

The letter recommends that the Commission:

“use the opportunity of revising the [anti-money laundering] Directive to require member states to collect and publish beneficial ownership information for companies, trusts and foundations in their jurisdiction. Nominee directors and shareholders should also be required to state on whose behalf they are working, as suggested by the Financial Action Task Force (FATF).”

“I cannot think of one good reason to hide the identity of a company’s beneficial owner,” said Jesse Griffiths, director of Eurodad, who co-sponsored the EU letter. “Privacy alone is never going to be enough of a reason to trump transparency of corporate ownership, which has the potential to greatly improve the lives of the world’s poor by curbing money laundering, tax evasion and terrorist financing in the EU and abroad.”

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Contact:

Robert Palmer
Global Witness / Member of the Task Force on Financial Integrity and Economic Development
Tel. +44 (0)20 7492 5860
rpalmer@globalwitness.org

Dietlind Lerner
Communications Director Task Force on Financial Integrity and Economic Development
Tel: +1 202-577-3455
dlerner@financialtransparency.org

Note to the Editor:

1. The World Bank this week launched the Grand Corruption Database, which compiles the details of large-scale corruption cases filed between 1980 and 2011, each of which involves the misuse of at least one legal entity or legal arrangement to obscure beneficial owners, and conceal the origin and/or destination of stolen assets worth at least US$1 million. These cases represent the World Bank’s underlying research its 2011 report, The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It.

2. The letter can be accessed here (PDF).