Financial Transparency Coalition

Global Witness

Task Force coordinating committee member Global Witness released Grave Secrecy today, a report telling the story of companies which were used to launder the proceeds of corruption, tax evasion and other crimes.  The report shows how shell companies based the UK, Bulgaria, and New Zealand were used to launder corrupt money originating from Kyrgyzstan’s AsiaUniversialBank.

The report gives tailored recommendations to countries, the European Union and the Financial Action Task Force on what steps they can take to help fix these costly problems.  The report outlines how a lack of beneficial ownership information, off-shore secrecy jurisdictions and weak anti-money laundering and anti-corruption laws enable money laundering, and how the national and international actors can fix them.

Global Witness’ new report, Grave Secrecy, shows how companies can be used as cover to launder the proceeds of corruption, tax evasion and other crimes.  It is so easy to set up a company in a way that hides the owner’s identity that criminals, terrorists and corrupt politicians can easily move money around the world with impunity.  Hidden company ownership facilitates state looting, denying the citizens of poor countries the chance to lift themselves out of poverty and leaving them dependent on aid.

In one example from the report, we found that a Russian shareholder of a UK company died three years before the company was incorporated with someone apparently using his identity to move US$700 million around the world.  Such examples show how it is possible to set up a company in the UK (and elsewhere) without even the most basic of checks being carried out on the identities of the supposed owners.

Global Witness also released, An Idiot’s Guide To Money Laundering. (PDF link) The 5-step illustration shows your average Joe everything s/he needs to know about starting their very own money laundering endeavor.  This satirical, yet very accurate, break-down of how shell companies can be used for money laundering is impressive not only because of how easy they are to set up, but also how effective they are in ensuring anonymity.  Check out the Idiot’s Guide here.