FTC 2013 Conference Preview: How Europe can set the standard on anti-money laundering rules

September 26th, 2013

Towards Transparency: Making the Global Financial System Work for Development, the Financial Transparency Coalition 2013 Conference, will take place in Dar es Salaam on October 1-2. To join in the discussion, or ask questions of the panel, Tweet us using the #FTCDar2013 hashtag, or follow FTC on Twitter at @FinTrCo.

Less than a month ago I started working for the Financial Transparency Coalition (FTC) in Brussels. I’m no stranger to the city, having lived and worked here for almost 7 years. In different positions I witnessed the European policy-making process at work. In the European Parliament I helped a Dutch politician with work ranging from co-legislating local public transport to reporting on the progress made by candidate countries wanting to join the European Union (EU). Afterwards I coordinated a network of organizations that aims to make the EU’s consultation and decision-making processes more transparent. In short, I got a close-up of the EU’s decision-making process and a general sense of who’s trying to influence it.

Do you care about stamping out corruption, money-laundering and tax dodging? (Yes!) Immediately my attention was drawn to FTC’s vacancy that listed tasks and asks that pretty much summed up who I am and what I stand for. I wrote, prepared, was interviewed, prepared some more, got interviewed some more.. And then, on a warm summer night in July, received a liberating call from FTC’s secretariat in Washington DC.

I haven’t had time to put the family pictures up on the new desk yet. The EU’s well underway to revise its anti-money laundering rules – with the Commission proposal being discussed by both the EU’s member states and the European Parliament – so my colleagues and I are doing all we can to convince them to do the right thing. This revision might be a once in a decade chance to get one of the FTC’s main asks codified: transparency around companies’ beneficial ownership. Beneficial owners are people that ultimately own and control companies and other legal entities that are used as such.

The big picture idea is that this information would undermine money-launderers setup anonymous companies that hide their criminal activities. Beneficial ownership transparency increases accountability of companies, and helps banks and other financial institutions to detect illicit money flows destined for Europe’s powerful financial centers. As such, they play a key role in averting the proceeds from tax evasion, corruption, and trafficking, from entering the EU’s single market. The link to Africa is obvious. In its recent report Global Financial Integrity says that illicit financial flows have been the main driving force behind the net drain of resources from the continent, with estimates ranging from $1.2 to $1.3 trillion.

Zooming in on Brussels: we carved up a list of responsible parliamentarians and countries in my first week; in the second the European Parliament’s leadership decided that not one, but two committees would lead on this work. This effectively doubled the amount of politicians involved, and put a Dutch Green and a Latvian Conservative together in the Parliament’s driver’s seat. Add to this the 28 member states, each with their responsible departments in Brussels and at home.. If cooking with two can feel like having one too many captains in your kitchen, imagine the kind of ratatouille this gives.

Although the dust is likely to stay up in the air till the final decision is taken, one thing’s crystal clear. The FTC and its friends are highly motivated to make Europe set a global standard in anti-money laundering measures, with information of beneficial owners available on public record.

Written by Koen Roovers

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