On 20 May the European Parliament gave its final approval for the 4th Anti-Money Laundering Directive, which requires the creation of centralised registers of beneficial owners – the real persons who have ultimate control – of a company or trust. Full access to the information will be granted to law enforcement and relevant government bodies. Members of the public, such as investigative journalists and NGOs, can be granted access to company ownership data if they can prove a legitimate interest. Transparency International calls on all Member States to make such information freely available to all citizens.
The identities of many individuals involved in grand corruption have been concealed through the use of anonymous shell companies, trusts and other entities. According to an analysis by the World Bank and UN of over 200 grand corruption cases, 70% involved corrupt politicians using anonymous companies and trusts to obscure their identity.
The new framework potentially leaves open significant money laundering loopholes, especially with regard to trusts. Information on trusts will not be made publicly available and the types of trusts covered will be limited in scope.
With the EU rules agreed, governments have two years to bring their systems into line with the new AML standards.
The full text of the 4th Anti-Money Laundering Directive is available here.
TI EU Press Release available here.