In December 2014, the EU agreed the final text of the 4th Anti-Money Laundering Directive, which will become law pending a final vote in the European Parliament. TI EU has welcomed the legislation as a step towards tackling corruption and anonymous ownership in the EU, such as shell companies and the abuse of trusts. The revisions to the Directive go far beyond the principles agreed by G20 leaders in November. However, concerns remain that the final legislation will fall short of full transparency of the real ‘beneficial’ owners behind companies and trusts. The identities of many individuals involved in grand corruption have been concealed through the use of anonymous companies, trusts and other entities.
Under the new legislation full access to company beneficial ownership data will be granted to law enforcement and relevant government bodies in central registers established by EU Member States. Partial access will be provided to the public such as investigative journalists and NGOs if they can prove a legitimate interest. A drawback of the compromise would be the creation of a new layer of bureaucracy to manage requests, which could also slow down investigations. It remains to be seen how countries will assess who has a legitimate interest. For trusts, information will be collected in closed centralised registers available only to government bodies and will not be available to the public.
Other important changes include tightening up of rules for politically exposed persons, more effective cooperation between EU Financial Intelligence Units, and the adoption of a “risk-based approach’.
Once the Directive is finally endorsed by the European Parliament in plenary (expected in April or May), EU Member States have two years to transpose the new standards into their national legislation. Transparency International encourages EU Member States to follow the UK, France, Denmark and the Netherlands during the transposition phase to ensure full public disclosure of company beneficial owners.