Adoption of AMLD Not an Endpoint, Citizens Want More Transparency

May 20th, 2015

Press Release for Immediate Release

BRUSSELS—After months of negotiations, debate, and dialogue, the European Parliament has formally adopted the 4th Anti-Money Laundering Directive (AMLD), setting the stage for a public discussion on what further measures are needed to combat tax evasion, money laundering, and other illicit flows.

“While the final adoption of the text is a formal end to a grueling process, the fact that the beneficial ownership registers won’t be fully public means there is still plenty of work to ensure that real transparency makes its way to the European Union,” said Koen Roovers, EU Advocate for the Financial Transparency Coalition.

The AMLD created national-level registers of beneficial owners—the real persons who have ultimate control of a company—but the information will only be fully available to government authorities; the public must pass a “legitimate interest” test to obtain any data.

“Though this law involved months and months of negotiations, it should be seen for what it is: a stepping-stone towards true transparency,” said Roovers. “To create the best environment for investors, businesses, and the general public, national level governments should go beyond the minimum requirements set forth in the AMLD, and look toward creating fully public registers, like that of the U.K.”

The UK will launch a public register of beneficial ownership information next year; Ukraine, Denmark, Austria, and France have also signaled their support for implementing public registers.

The call for public information doesn’t stop at the borders of the EU, either. Ahead of the United Nation’s 3rd Financing for Development Conference in July, the UN included beneficial ownership registers as a key component to harnessing sustainable domestic revenue to finance development and infrastructure. And a recently released report from Thabo Mbeki’s High Level Panel on Illicit Financial Flows from Africa called for public registers of beneficial ownership information. It cited hidden company ownership as one of the main culprits in facilitating the movement of more than $1 trillion in illicit financial flows from developing countries every year.

Citizens are also questioning why so much secrecy is granted to the financial system, and specifically to company ownership. Survey data released today from Transparency International shows that four out of five EU citizens said they are in favor of public beneficial ownership requirements.

“Rather than racing to the bottom as we’ve seen so often in so many European tax havens, let’s see governments take heed of the will of their citizens, investors, and business experts and race to the top instead,” added Roovers.

Notes to the Editor:
  1. The 4th Anti-Money Laundering Directive will require national-level registers of beneficial ownership information to be created throughout the European Union. These registers will be open to government authorities, but the public will have to pass a “legitimate interest” test.
  2. The Mbeki High Level Panel Report on Illicit Financial Flows from Africa, commissioned by UNECA, was released in January of 2015.
  3. The 3rd Financing for Development Conference will be held from July 13-16 in Addis Ababa, Ethiopia.

Christian Freymeyer

Written by Financial Transparency Coalition

Image used under Creative Commons Licensing / Flickr User Thijs ter Haar

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